Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — DUCHY OF LANCASTER

Non-departmental Public Bodies

Mr. William O'Brien: To ask the Chancellor of the Duchy of Lancaster what plans he has to make non-departmental bodies more accountable to the House; and if he will make a statement. [27664]

The Chancellor of the Duchy of Lancaster (Mr. Roger Freeman): The Government are committed to improving the accountability of non-departmental public bodies. We welcomed the recommendations in the first report of the Committee on Standards in Public Life, and have recently published a consultative paper on propriety and accountability issues in public bodies.

Mr. O'Brien: Will the Chancellor address the vexed question of Members of Parliament who write to Ministers and find that their questions are shuttled off to some agency or other body? Many of those questions relate to the health, welfare and destinies of our constituents. Will the right hon. Gentleman ensure that Ministers who are responsible for their Departments answer such questions? Will he also ensure that non-departmental bodies are more open and democratic, and serve members of the community as they wish to be served?

Mr. Freeman: I am sure that all hon. Members have found the experiment involving chief executives of agencies answering questions of fact helpful. I well understand that one or two hon. Members might not approve of the practice, and it is open to them to write directly to Ministers and to ask for replies that can be made public in due course. I shall, however, bear in mind what the hon. Gentleman has said when we review the practice.

Dr. Spink: Does my right hon. Friend agree that it is absurd to refer to the governing bodies of grant-maintained schools as quangos? Are not those bodies staffed by dedicated local people who give of the wealth and breadth of their experience? Surely they should not be made more directly accountable to the House; they do an excellent job now—and they would no doubt have a view about the withdrawal of child benefit from some of their students by the Labour party.

Mr. Freeman: I am grateful to my hon. Friend for paying tribute to the work of not only grant-maintained school governing bodies but, by implication, national health service trusts and other bodies that draw on volunteers from the private sector who give their time freely and, in most cases, without payment. Let me record the Government's gratitude to all who serve on such bodies.

Mr. Derek Foster: Is not the real problem about quangos the fact that they have become the unelected, unaccountable and secretive state? As the right hon. Gentleman's party has been swept from office in local government, has it not transferred functions to unelected quangos and packed them with its placemen and women, and are not those bodies—health authorities, for example—totally unaccountable to the communities that they serve? Why does the Chancellor not apply his mind to that problem?

Mr. Freeman: I do not accept the right hon. Gentleman's analysis, and his suggestion that such bodies are in some way unaccountable to their local communities. The Conservative party has argued, and continues to argue successfully, that they are drawn from—and therefore represent, in a very real sense, the aspirations and needs of—their local communities.

Mr. John Marshall: Is my right hon. Friend aware that one of the first schools to become grant-maintained was Hendon school, in my constituency, which is now over-subscribed rather than under-subscribed? Is he also aware that, while Labour Members may attack non-departmental bodies in the House, they are happy to send their children to grant-maintained schools? That includes the Leader of the Opposition.

Mr. Freeman: I note what my hon. Friend says. We have reduced the number of non-departmental public bodies by 43 per cent. since 1979—from 2,167 to 1,227 at the end of 1995. That excludes grant-maintained schools and national health service trusts, but it reflects a welcome downward trend.

Government Policy Co-ordination

Mr. Simon Hughes: To ask the Deputy Prime Minister what recent review he has conducted of the co-ordination of Government policy; and what conclusions he has reached. [27665]

The Deputy Prime Minister (Mr. Michael Heseltine): The co-ordination of Government policy is kept under constant review. I have no proposals to change present arrangements.

Mr. Hughes: The first part of that answer might be a jolly good thing, because I was going to ask the Deputy Prime Minister whether there had been a particular review since the local government elections. If the governing party loses half the seats that it is defending, if it is left with about a dozen councils in England, Scotland and Wales, if it has the fewest local government seats that it has had since, I think, the last war and if it is now the third party in local government, is there not something to review and, if so, what is the result of the Government's evaluation of an abysmal local election performance?

The Deputy Prime Minister: I should have thought that the hon. Gentleman would remember that, at the last election, his party lost every by-election seat that it had won and that he would have learnt a lesson from that: one does not take short-term measures when one is fighting a general election campaign, which will be determined in real circumstances in a year's time, when the Tories will win.

Mr. Jessel: On Government policy on the national lottery and its provision for good causes, is my right hon. Friend aware that the Charities Aid Foundation has announced—if I heard my car radio right about half an hour ago—that there has been no reduction in the general provision of money for charities by the public as a result of the national lottery, and that that is apart from the money thrown up for charities by the national lottery, which is a tremendous national achievement and has conferred terrific benefit?

The Deputy Prime Minister: My hon. Friend is right to draw the House's attention to that exciting news, which builds on the considerable increase in charitable giving that other Government measures have already achieved. The present lottery additionality is welcomed by many causes.

Mr. Prescott: Does the Deputy Prime Minister acknowledge the disarray in the presentation of Government policy on British beef, where the Secretary of State for Health accused the public, and not the cows, of being mad? Does the Deputy Prime Minister therefore agree with the Foreign Secretary's assessment in his leaked letter to the Prime Minister that the Government suffer from poor co-ordination of policy? Does the Deputy Prime Minister accept any responsibility for that?

The Deputy Prime Minister: The whole House knows that this is one of the most difficult issues that any Government have faced in a long time; trying to make party points out of it serves no purpose. The Government's policy is clear: we are, where we can, helping the farming community and we are dealing with the issues in world forums and in the world political scene, wherever relevant. We must persuade other people in sovereign countries to change their minds. We will not do so by belittling our effort on a party political basis.

Mr. Wilkinson: Reverting to the vexed issue of the European Union's ban on British beef exports and the difference—the apparent difference, of course—in the governmental approach to it between acquiescence and possible retaliation, will my right hon. Friend and Her Majesty's Government concentrate on the EU's ban on British beef exports to non-EU countries as that is clearly beyond the EU's jurisdiction? Will my right hon. Friend make it clear that, if that aspect of the ban persists, Her Majesty's Government will be prepared to retaliate?

The Deputy Prime Minister: I think that my hon. Friend would want to bear in mind the fact that many of those countries introduced a ban of their own and that a significant number of them did so long before the European Union. This is an international issue; it is now a European issue. The beef market in many European countries is suffering more than this country's beef

market. This stretching, difficult political issue can be dealt with only by negotiation, however aggravated and difficult it undoubtedly is.

Government Policy (Europe)

Mr. MacShane: To ask the Deputy Prime Minister what new initiatives he is planning to promote Government policy on Europe. [27669]

The Deputy Prime Minister: The Government have recently published a very clear statement of their policy on Europe in the White Paper on the intergovernmental conference, "A Partnership of Nations". I commend it to the hon. Member.

Mr. MacShane: The tiredness of that reply and the feebleness of the previous one show exactly the extent to which the Deputy Prime Minister no longer puts real energy behind any of the Government's policies. His party is now a sick joke over Europe. As a strong European and a man who has given many years of service to his party, does he not feel that the time may have come to retire and enjoy a few years of peace, leaving the party fight to the rabble behind him?

The Deputy Prime Minister: No.

Mr. Anthony Coombs: As the Labour party so cravenly does not want to be isolated on Europe, and as the Liberal Democrats want a European federal state, will my right hon. Friend confirm that the Conservative party is the only one that wants to see the competencies of the European Union repatriated to this country in the forthcoming intergovernmental conference?

The Deputy Prime Minister: My hon. Friend gives me the opportunity to state quite clearly that the real difference between the Government and the Opposition side is that we wish to have a Europe based on the nation state whereas they wish to have a Europe to which they are prepared to move critical powers, the effect of which would be to undermine the competitiveness of the British economy. Nowhere is that more clear than in their willingness to accept the social chapter and the minimum wage, the effect of which would be to deter investment in this country and to create more unemployment than is in any way justified. My authority for that last statement is the right hon. Member for Kingston upon Hull, East (Mr. Prescott), who has made it absolutely clear that the minimum wage, "as any fool knows", to quote his words, will cause a loss of jobs.

Mr. Beith: Will the Deputy Prime Minister clarify whether the Government see the European Court of Justice as a necessary body to which the Government must have recourse if other European countries take action that distorts markets or prevents free competition, as in the case of beef, or as an unwelcome intrusion into the private affairs of member states? Surely it has to be one or the other.

The Deputy Prime Minister: No, it does not have to be one or the other at all. There cannot be a single market without rules and there cannot be rules without someone to enforce them. Therefore, there has to be a European


Court of Justice. In the Government's view, that does not mean that all its decisions are right, or that some of its powers cannot be improved. As we propose in the White Paper, we intend to address those issues and we shall certainly do so at the intergovernmental conference.

Mr. Caborn: Will the Deputy Prime Minister tell the House how he intends to promote the new policy on competitiveness that was outlined by the President of the Board of Trade in a speech last week? It cuts across the two White Papers on competitiveness and has left them in total disarray. How will the right hon. Gentleman communicate that?

The Deputy Prime Minister: If I had a problem of that sort I would address it, but as there is no such problem I have not had to put my mind to it.

Deregulation Task Force

Mr. Jim Cunningham: To ask the Deputy Prime Minister how many firms with fewer than 100 employees are represented on the Government's deregulation task force. [27671]

Mr. Freeman: We do not hold figures for the number of people employed by each of the firms that has a member on the deregulation task force. However, three of the 12 business representatives are from small firms.

Mr. Cunningham: Will the Minister explain why there are more ex-Tory Members of Parliament on the deregulation task force than small business men, bearing it in mind that 99 per cent. of the task force's work involves small businesses?

Mr. Freeman: The appointments to the deregulation task force—the posts are unpaid—are drawn from those with expertise in different sectors of the economy. I pay tribute to the work of the task force under its current chairman, the right hon. Francis Maude, who has made a valuable contribution to identifying areas in which we should deregulate. Criticism of the deregulation task force comes ill from a party that, as I understand it, wants to scrap the task force and the deregulation unit in the Cabinet Office.

Mr. Steen: rose—

Madam Speaker: It is scarcely deserving, Mr. Steen, but I shall recognise you.

Mr. Steen: I explained the circumstances that brought me into the Chamber, and on the way I was delayed by a call that all of us understand.
Is not the problem with deregulation one of culture, and is not the culture of this place—of hon. Members, Ministers and civil servants—geared to passing more laws? This place spends all its time passing laws. Until we change that culture so that Ministers, hon. Members and civil servants do not think about passing more laws, we will not make the progress on deregulation that we should like.

Mr. Freeman: Had my hon. Friend been able to put the question on which I had done a considerable amount of research, I might have been able to tell him that, in changing the culture, it is very important for Departments to focus on areas for repeal of primary and secondary legislation. We have made a good start by identifying 1,000 necessary repeals or amendments. We have already dealt with more than 600 of those, and the remaining 400 will have been dealt with by the end of this calendar year. That culture change should apply not only to Whitehall but to Brussels.

Next Steps Agencies

Mr. Heppell: To ask the Deputy Prime Minister what plans he has to increase the number of next steps agencies in the next 12 months. [27672]

The Parliamentary Secretary, Office of Public Service (Mr. David Willetts): With some 70 per cent. of civil servants already working under next steps arrangements, we are getting very close to the original estimate of covering three quarters of the civil service. There are currently 124 agencies in operation, as well as Her Majesty's Customs and Excise and the Inland Revenue, which operate on next steps lines. I would expect about two dozen more agencies to be set up in the coming year.

Mr. Heppell: Does the Minister agree with the views expressed today in The Guardian by the former chief executive of the Prison Service, that all Government agencies should be protected from incompetent and over-excited Ministers?

Mr. Willetts: The framework within which staff in next steps agencies work is very clear: they are civil servants; they are bound by normal civil service rules; they are accountable to Ministers; and Ministers, in turn, are accountable to the House.

Deregulation

Sir David Knox: To ask the Deputy Prime Minister if he will make a statement on the progress of deregulation. [27673]

Mr. Pike: To ask the Chancellor of the Duchy of Lancaster what are the main objectives for deregulation during the next 12 months. [27674]

Mr. Freeman: Eleven deregulation orders have passed into law, and there is a steady flow of new orders. We shall also work to make enforcement decisions more business friendly and to encourage a similar approach to regulation in Europe. Specific priorities include pay-as-you-earn and national insurance contributions joint working and a substantial reduction in the burden of Government surveys.

Sir David Knox: Does my right hon. Friend agree that, while it is sensible to get rid of pointless and unnecessary regulations, it is not very sensible to deregulate merely for the sake of deregulation? Does he agree that many regulations that appear silly to the layman can be justified and should be retained?

Mr. Freeman: The House will recognise that there is a constant flow of new regulations emanating from Brussels and from Whitehall, which is inevitable in an increasingly complicated society. Some regulations, however, have outlived their usefulness—I refer specifically to Victorian social legislation on what we do on Sundays—and are no longer appropriate. It is appropriate to remove specific burdens on businesses when that is helpful and does not jeopardise the protection of employees or the environment.

Mr. Pike: Why does not the Chancellor admit that—other than many of those petty, outdated Victorian regulations that surely should have gone many years ago—his Department is increasingly discovering that regulation is necessary for protection in many areas and that it is impossible to remove much of it, contrary to what the Government thought possible a few years ago?

Mr. Freeman: Interestingly, the Health and Safety Commission has discovered that it can, with safety and without jeopardising the protection of the consumer or the work force, reduce by 40 per cent. the number of health and safety regulations. That shows what can be done, Department by Department, without jeopardising the principles to which the hon. Gentleman referred and with which I agree.

Deregulation (Small Business Sector)

Mr. Llwyd: To ask the Deputy Prime Minister what proposals there are to deregulate the small business sector; and if he will make a statement. [27675]

Mr. Willetts: A package of new measures for small business was announced at the "Your Business Matters" conference on 11 March. The measures included a single notification point for tax and national insurance for new businesses and new rights for business in enforcement actions. A further response to the issues raised by small businesses during the conferences will be published in June.

Mr. Llwyd: I thank the Minister for that answer. I am a small business man—I have been in business for some 20 years—and find the notion of depriving thousands of people of the protection afforded by employment tribunals quite abhorrent. Indeed, that feeling has been expressed wherever I have been. Is it not a ridiculous notion? I hope that the Government are not stupid enough to pursue it.

Mr. Willetts: There will be no question of making any such proposals without full consideration and legal advice. Overall, however, the Government are committed to reducing the burdens on business. As the hon. Gentleman is a small business man, I am sure that he will recognise that the fact that 500,000 of the smallest companies no longer have to have their accounts audited is a welcome easing of the burdens that they face.

Government Policy Co-ordination

Mr. Win Griffiths: To ask the Deputy Prime Minister if he will make a statement on his recent activities concerning the co-ordination and presentation of Government policy. [27677]

The Deputy Prime Minister: I continue to chair the ministerial group on the co-ordination and presentation of Government policy and to promote the remarkable success of our polices in creating in this country the enterprise centre of Europe.

Mr. Griffiths: I thank the Deputy Prime Minister for that answer. Will he be appearing on television to support the views of the Foreign Secretary, who is seeking ways deliberately to block business in Europe, or the views that he has expressed in the past and which are shared by the Chancellor of the Exchequer about playing a constructive role in the European Union?

The Deputy Prime Minister: But the Foreign Secretary, the Chancellor of the Exchequer and I are wholly agreed on our approach to European policy.

Small Businesses

Mr. Timms: To ask the Deputy Prime Minister what steps he is taking to improve the competitiveness of small businesses. [27679]

Mrs. Clwyd: To ask the Deputy Prime Minister what steps he is taking to improve the competitiveness of small businesses. [27682]

Mr. Freeman: The Prime Minister announced a range of measures to help small firms at the final "Your Business Matters" conference in March. They included further reductions in bureaucracy, measures to help with late payment and a radical review of the Government's business support schemes. The Government will respond in full to the issues raised at the conferences in a publication produced alongside the third competitiveness White Paper in the summer.

Mr. Timms: Why, then, have the Government placed the new burden on small businesses of having to check the immigration status of job applicants? Would not it have been better for the Government to have supported Labour's amendment to the Asylum and Immigration Bill, which would have exempted firms with fewer than 10 employees from that requirement and from the £5,000 fine when they get it wrong?

Mr. Freeman: I know that my right hon. and learned Friend the Home Secretary has made great efforts to ensure that the burdens on businesses caused by their enforcing the provisions in the Asylum and Immigration Bill are minimised as much as possible. However, the provisions must be effective and we cannot simply exempt small firms from the Bill's general requirements.

Mrs. Clwyd: How can the Minister expect to be taken seriously on this issue when his boss boasts about stringing along his creditors and when late payments to small businesses doubled when his boss was President of the Board of Trade?

Mr. Freeman: That is a travesty of what my right hon. Friend the Deputy Prime Minister and First Secretary of State said or implied or believes. In any case, my right hon. Friend is well able to answer for himself and has already done so.
As for setting a standard for prompt payment, the Prime Minister and the President of the Board of Trade have made it plain that the Government must set that standard. The Prime Minister has taken steps to ensure that each Department examines its own practices and pays promptly but, very often, the reason for late payment is that there is some fundamental problem with the invoice or bill itself. One cannot expect Government Departments, which are dispensing taxpayers' money, automatically to pay every bill simply because there is a payment deadline to be met. I hope that the hon. Lady is satisfied with that reply.

Government Policy

Mr. Jacques Arnold: To ask the Deputy Prime Minister which was the principal Government policy with which he was concerned in the week beginning 6 May. [27680]

The Deputy Prime Minister: I have continued to work on a full range of those Government policies for which I am responsible.

Mr. Arnold: When my right hon. Friend co-ordinates Government policy, does he have the problem that some Cabinet members—[Interruption.] Does he find that some Cabinet members have not spoken to each other for 18 months, which is precisely the problem that his opposite number in the Labour party has with shadow Cabinet members?

The Deputy Prime Minister: My hon. Friend raises a most interesting point, which shows proper compassion for the Labour party's activities. I would be very happy to offer to hold a reception for the Leader of the Opposition, so that his shadow Cabinet could get together in convivial circumstances and try to sort out their difficulties in private.

Mr. Skinner: Given his Government's record, has not the Deputy Prime Minister got a cheek to lecture anybody about not being united and not speaking to one another? Is it not a fact that a little over 12 months ago his Prime Minister said that he had three bastards in the Cabinet? I told him that he could not count. Then he had a ballot, in which the Deputy Prime Minister refused to take part—Redwood v. Deadwood—and the net result was that the Prime Minister found that he had 89 bastards instead of three.

The Deputy Prime Minister: I shall be very happy to invite the hon. Gentleman to the reception as well—then the shadow Cabinet could really learn what new Labour is all about.

Madam Speaker: We now come to Question 16.

The Deputy Prime Minister: rose—

Mr. Prescott: Not you again.

The Deputy Prime Minister: Yes, there is more of this; it is me all the way from now on. [Laughter.] I have to keep the deputy leader of the Labour party amused. Since the hon. Member for Hartlepool (Mr. Mandelson) cannot amuse him, I can at least bring a little light relief.

English Language

Mr. Rathbone: To ask the Deputy Prime Minister what priority he attaches to English as a language when co-ordinating Government policies. [27681]

The Deputy Prime Minister: The Government attach great importance to the use of clear and appropriate language in all areas of their work.

Mr. Rathbone: Although this question does not in any way point to this Chamber, it is notable that the Government are reducing expenditure on the British Council, the great spreader and supporter of the English language throughout the world. Would the Government reconsider the reduction?

The Deputy Prime Minister: I share my hon. Friend's views about the importance of the British Council's work, but the allocation of funding responsibilities must remain a matter for my right hon. and learned Friend the Foreign Secretary.

Mr. Flynn: Should not the Procedure Committee be congratulated on recommending that a policy that has applied since 1536 be reversed so that for the first time in 460 years a language other than English is to be used in conducting the business of the House? Will the right hon. Gentleman give an undertaking that he will do his best to speed up the recommendation that both the beautiful languages of Wales—Welsh and English—should be used in the proceedings of the only parliament that Wales has?

The Deputy Prime Minister: It sounds as though this is another example of precipitate action. The hon. Gentleman has raised an interesting point and I shall give it a great deal of attention later today.

Deregulation

Mr. Flynn: To ask the Deputy Prime Minister what assessment he has made of the effects of deregulation on public safety. [27687]

Mr. Freeman: When making orders under the Deregulation and Contracting Out Act 1994, Ministers are required to show that necessary protection for public safety will be maintained. Deregulation is about making legislation clear and less burdensome—not about removing legitimate public protection.

Mr. Flynn: In the light of the continuing tragedy of bovine spongiform encephalopathy, why do not the Government stop blaming everyone else—from the Opposition to other countries—when the root of this uniquely British disease stems from a decision taken in the 1980s to deregulate the rendering industry? When will the Government learn that the decisions that they are taking on deregulation might cause enormous problems to public safety in the years ahead?

Mr. Freeman: I do not accept the analysis by the hon. Gentleman. If he wishes to pursue this line of questioning about the connection between deregulation and the origin of BSE, I shall be delighted to enter into correspondence with him. He is factually incorrect. I refer to assessing the


risk to society as a result of introducing new regulations and repealing existing regulations. The Government have recently published a document—I have placed a copy in the Library—to help Departments determine the risk inherent in any repeal of legislation. It details how Departments can quantify risk and the benefit to society of legislating and of repealing legislation.

Oral Answers to Questions — OVERSEAS DEVELOPMENT

Trade Unions (Third-world Countries)

Mr. MacShane: To ask the Secretary of State for Foreign and Commonwealth Affairs what assistance he provides to support the development of free trade unions in third-world countries. [27692]

The Minister of State, Foreign and Commonwealth Office (Mr. Jeremy Hanley): Under the British aid programme, support is provided for projects to improve working conditions and terms of service through the workers group development scheme, and for trade union education and training through the joint funding scheme.

Mr. MacShane: I had hoped that the Minister would provide a figure as my question was about assistance. As the Minister knows, this year the Government will provide about £200,000 to support democratic trade unionism in the third world. In comparison, the United States will provide about $20 million; Sweden will provide about £6 million; and even the Netherlands—a country with a similar profile to the United Kingdom—will provide some £7 million.
When will the Government drop their pathetic, mean-minded hostility towards trade unions? Even if the Government hate trade unions in this country, they should recognise that they are part of the building blocks of democracy in the third world. The Government should give support to democratic trade unionism in the third world.

Mr. Hanley: We support responsible trade unionism as part of promoting good government. Since 1987 we have given £1 million in aid to the joint funding scheme, and every year we give £200,000 to the workers group development scheme for trade union and employee development. That scheme covers important issues such as women's rights, health and safety, and financial management.
I believe that the new workers group development scheme is a success. It has been fully spent this year, with nine projects. However, there are competing interests for funding by the Department. I believe that the current scheme is a success.

Mr. Jessel: The power and influence of trade unions were drastically curtailed in this country in the early 1980s, which was followed by the biggest period of economic expansion ever in the history of this country—which is being echoed by the growth in our economy in the mid-1990s. Therefore, is it not poor advice to developing countries that they should foster the development of trade unions?

Mr. Hanley: I do not agree with my hon. Friend. Support for trade unions forms part of our support for

good government. We want to encourage representative and responsible civil
societies and responsible trade unions, along with business associations, have a role in this. Some of my hon. Friends have suggested that business associations are just as important as trade unions for growth and democracy—and I agree. We are willing to consider support for business associations, but they tend to be more self-reliant.

Drinking Water

Mr. Fabricant: To ask the Secretary of State for Foreign and Commonwealth Affairs what initiatives he is taking with the privatised water companies to provide expertise and material for the distribution of drinking water in developing countries. [27693]

Mr. Hanley: Four of the major privatised water companies are currently involved in projects funded under the British aid programme, which relate to the supply and distribution of drinking water in developing countries. We will continue to encourage the water companies to bid for new water-related projects in developing countries.

Mr. Fabricant: Is my right hon. Friend aware that, since privatisation, Severn Trent, which of course supplies water to constituents in Mid-Staffordshire, gives £55,000 a year to Water Aid in developing countries; that, last year, about £300,000 was collected from staff of Severn Trent for Water Aid in developing countries; and that, this year, Severn Trent adopted Ethiopia for exploration for and distribution of fresh water? What more can my right hon. Friend do to ensure that other water companies follow that lead?

Mr. Hanley: I am aware of Severn Trent's excellent record, which my hon. Friend is right to bring to the attention of the House. He asks what more can be done.
During the launch of a recent water initiative called Water for Life, my right hon. and noble Friend the Minister for Overseas Development encouraged the United Kingdom private sector, including the water companies and other non-governmental organisations, to take an active role in the development of the water sector in developing countries.
I am pleased that, in addition to the support provided under Britain's bilateral aid programme, the privatised water companies are encouraged to pursue those activities in the water sector in developing countries, funded by the multilateral agencies to which the UK contributes.
I should also mention the overseas projects board water group, which is convened by the Department of Trade and Industry and chaired by my right hon. Friend the Member for Bridgwater (Mr. King). It provides a forum for the exchange of information with the major water boards about current activities and opportunities in the water sector in developing countries.

Reconstruction (South Africa)

Mr. Rathbone: To ask the Secretary of State for Foreign and Commonwealth Affairs when he last had discussions with representatives of the South African Government about Britain's contribution to reconstruction in that country; and if he will make a statement. [27695]

Mr. Hanley: We maintain a regular high-level dialogue with the South African Government. My right hon. and learned Friend the Chancellor of the Exchequer, my right hon. and noble Friend the Minister for Overseas Development and my hon. Friend the Minister for Trade have all visited recently. Bilateral relations are excellent and British aid to the transition process is highly valued.

Mr. Rathbone: While I welcome that statement and endorse those efforts, what advance is being made in the European Union to establish a better trading relationship between South Africa and the European Union, which that country desperately needs?

Mr. Hanley: I thank my hon. Friend for that question because Britain is highly committed to giving South Africa better access to the EU market as an important way of contributing to its growth. We have argued throughout that the new arrangements should be as generous as possible. However, some EU member states wanted to limit the scope of the agreement by excluding, from the outset of the negotiations, many South African agricultural exports; we have consistently opposed that.
After several months of talks within the European Union, the 25 March meeting of the EU Foreign Ministers had before it a draft mandate to open negotiations with South Africa. The mandate was not as liberal as we wanted, and we had the option of blocking it, but the South Africans told us that they wanted to begin negotiations as soon as possible so we decided to abstain. We have nevertheless issued a declaration outlining our concerns, with which Sweden associated itself.
I agree with my hon. Friend that we need to improve the relationship between the EU and South Africa, primarily to further the cause of improving South Africa.

Miss Emma Nicholson: Is the Minister able to assure us that he is doing everything he can in the Council of Ministers to gain entry into the full Lomé convention for South Africa, as that would be of such benefit to South Africa's reconstruction plan?

Mr. Hanley: Yes. The Commission recently opened direct negotiations with South Africa to work out the details of the trade agreement. The mandate contains an explicit commitment to regional economic co-operation and integration, and states that South Africa will be encouraged to provide improved market access opportunities to its southern African neighbours.
On EU-South African liberalisation, the Commission has made it clear that it will return to the Council to ask for greater negotiating flexibility if the current mandate proves too restrictive.

Mr. Batiste: Does my right hon. Friend agree that trade is a very important ingredient in the reconstruction of South Africa? Will he have a word with his colleagues at the Department of Trade and Industry to ensure that, at a time when funding for trade missions is very tight, trade missions to South Africa have some measure of continuity from year to year so as to encourage mutual arrangements between small businesses in the respective countries?

Mr. Hanley: I thoroughly agree with my hon. Friend: trade and investment is the key to South Africa's long-term prosperity. The Government are committed to developing commercial links with South Africa, but there is still a role for well-targeted aid. Our aid is designed to help to develop sound policies, to establish models of sustainable development and to focus on disadvantaged groups. We must improve our trade links, and my hon. Friend points in a useful direction with trade missions.

World Poverty

Mr. William O'Brien: To ask the Secretary of State for Foreign and Commonwealth Affairs what plans he has to meet the Christian Aid group to discuss world poverty; and if he will make a statement. [27696]

Mr. Hanley: My right hon. and learned Friend the Foreign Secretary met representatives of Christian Aid and other non-governmental organisations in the development field on 23 January and plans to have a follow-up meeting with them later this year. I met a number of NGOs, including Christian Aid, at a Foreign Office seminar on 25 April. My right hon. and noble Friend the Minister for Overseas Development and her officials have frequent contacts with those organisations, the next such meeting being on 16 May. Our discussions with the NGOs cover a wide range of issues affecting developing countries, including poverty reduction.

Mr. O'Brien: In view of the Minister's response, will he assure me that he will support the campaign by the Christian Aid group to eradicate poverty in Africa? In 1994, the poor people of Africa paid £10 billion to the country's wealthy creditors and obviously assistance is going in the wrong direction. Will the Minister support Christian Aid's campaign to try to reverse that process?

Mr. Hanley: Yes, I certainly believe that that is the main focus of our aid to Africa. The hon. Gentleman will be aware that we have written off £1.2 billion in Overseas Development Administration debt for 31 countries—of which 18 were African—since the 1970s. Poverty reduction in Africa is an important part of all of our programmes. It is one of the reasons why at the spring meeting of the World bank and the International Monetary Fund last month it was agreed that several heavily indebted, poor countries have an unsustainable burden of debt and that action must be taken to reduce it so as not to put their reform efforts at risk. That action is being taken on the multilateral debt side. We are leading not only the European Union but the world community in trying to alleviate poverty in Africa.

Miss Lestor: Can the Minister confirm that at the recent conference in Oslo, which an ODA representative attended, the NGOs made it clear that they believe that the 20:20 compact—endorsed on a voluntary basis by the British Government at the world summit in Copenhagen last year—forms a vital part of a comprehensive strategy for the alleviation of poverty? Given that the Government have reduced this year's aid budget by £124 million; that, on current plans, the proportion of gross national product devoted to aid will fall to an all-time low of 0.26 per cent. by 2000; and that the fundamental expenditure review does not refer to the 20:20 compact, what plans does the


Minister have to meet the United Nations target of 20 per cent. development assistance to be invested in basic social services, such as primary health care and education? Why did we achieve only about half of that target in 1994–95?

Mr. Hanley: The 20:20 concept has attracted a good deal of attention because it is a superficially straightforward idea. However, it is unsatisfactory because it emphasises only the quantity of resources at a time of increasing donor awareness about the need to focus on impact, quality and effectiveness. It is an old-fashioned emphasis on inputs rather than outputs, and we want to avoid a return to the 1970s approach of top down, vertically targeted activities which failed to involve the beneficiaries in any assessment of their needs and priorities.
In answer to the hon. Lady's fifth or six question, we still have a substantial aid programme. I repeat that the United Kingdom remains the fifth largest donor despite the small budget reduction this year. We have a substantial budget of £2.154 billion in 1996–97. In 1994, our aid programme was 0.31 per cent. of GNP, which is above average for all donors, and the quality of British aid is extremely high. We still have an excellent record in aid. I do not accept the hon. Lady's criticisms. If she wants to make a financial commitment to increasing aid to 0.7 per cent., I would be grateful if she would say so clearly in the House.

Emergency Disaster Relief

Mr. Jacques Arnold: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Britain's emergency disaster relief work. [27698]

Mr. Hanley: Since 1 April, the ODA has responded to new emergencies in Bolivia, Chad, Ecuador, Georgia, Lebanon and Mongolia, with grants totalling £844,000. It has also continued funding action in more than 20 other long-term situations.

Mr. Arnold: Is it not the case that the United Kingdom has achieved an enviable reputation for flexibility, speed and effectiveness in the overseas aid that it provides to emergency disaster relief?

Mr. Hanley: My hon. Friend is absolutely right. Our response to emergencies is highly regarded, but we cannot do everything. So it is important that we concentrate on what we can do best: supporting the excellent British specialist non-governmental organisations, running a limited number of direct operations and acting swiftly through our diplomatic posts, as we have in the past month in Bolivia, Lebanon and Mongolia. My hon. Friend is absolutely right. Our emergency response is excellent.

Oral Answers to Questions — PUBLIC ACCOUNTS COMMISSION

Comptroller and Auditor General

Mr. John Marshall: To ask the Chairman of the Public Accounts Commission what is the number of accountants employed by the Comptroller and Auditor General. [27701]

Sir Peter Hordern (Chairman of the Public Accounts Commission): I understand that the National Audit Office currently employs more than 350 qualified accountants and 70 qualified accounting technicians. A further 103 staff are training for those qualifications. In addition, the NAO contracts out about 12 per cent. of accounts audit work to the private sector. As a result, all accounts are audited by trained staff.

Mr. Marshall: Would my right hon. Friend consider the secondment of just one of those accountants to the United Nations so that Mr. Boutros Boutros-Ghali could learn the virtues of economy? Could he also send one to the German Government, who have yet to pay their annual subscription to the United Nations? Should not those who call for a single European foreign policy at least be willing to pay the bill?

Sir Peter Hordern: The Comptroller and Auditor General is a member of a three-nation board that audits the accounts of the United Nations. Of course, in that capacity he is responsible to the United Nations and not to the House, but if he is able to establish that contributions have not been paid and that the United Kingdom bears an undue burden as a result of that, it would be open to any Member of the House or the Public Accounts Committee to ask him for a report so that the issue could be considered.

National Audit Office

Mr. Steen: To ask the Chairman of the Public Accounts Commission if he will increase the allocation of staff costs in respect of the operating budget of the National Audit Office. [27702]

Sir Peter Hordern: The National Audit Office estimate for 1996–97, approved by the Commission in January, provides for an increasing number of financial audits, for a rise in the level of regularity and propriety work and for sufficient value-for-money investigations to offer the Committee on Public Accounts a margin of choice in the subjects that it considers.

Mr. Steen: That was an impressive answer. However, the House should be aware that, as the National Audit Office aims to ensure that we get better value for money, as all the legislation we pass here is properly vetted and costed and as we have approved 7,850 statutory instruments since January 1994, it must be inevitable that we will have to increase even further the staff at the National Audit Office. As we pass more rules, regulations and Acts of Parliament, the number of staff, the amount of bureaucracy and the number of officials will rise sky high. Will my right hon. Friend comment on that?

Sir Peter Hordern: I do not agree with my hon. Friend. The National Audit Office is an example to every Department. It is increasing the volume of its work and effectiveness at lower cost—in not just real but cash terms. If every Department were to do the same as the NAO, which works on our behalf, the Government and the House would be a great deal better off.

Mr. Olner: If Departments really respect the view of the National Audit Office, how come the Government do not accept the views of the auditors in respect of Westminster city council?

Sir Peter Hordern: Westminster city council's accounts are audited by the Audit Commission, not the National Audit Office.

Oral Answers to Questions — OVERSEAS DEVELOPMENT

British Council

Mr. Hain: To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the current role of the British Council in overseas aid programmes. [27699]

Mr. Hanley: The British Council makes a valuable contribution to the UK aid programme, by supporting the Government's development objectives through activities financed by the grant in aid, and more generally as a supplier of educational and other services under contract to the Overseas Development Administration and other development organisations.

Mr. Hain: If the Government recognise that the British Council performs such a valuable role, why are the Government so savagely cutting the council's budget by £22 million over the next three years? That is surely the act of a bunch of cretins, and it breaks an election pledge because in 1992, the Conservatives promised to strengthen the British Council. Having seen the council's valuable work in Angola, Egypt and Gaza I can confirm that the council is not only conducting good works but serves as a shop window for Britain's commercial organisations and image abroad.

Mr. Hanley: Activity in the countries covered is at a record level. The council has 229 offices in 109 countries, compared with 108 offices in 79 countries when we took office. There is no change in Government policy towards British Council grant in aid. We continue to value highly the council's work in development and cultural diplomacy, but the 1995 public expenditure round was particularly rigorous and resulted in a reduction in funds for the aid programme. It was not possible to protect the British Council from the effects, but the way in which that reduction will work its way through is being considered and there will be decisions before the end of this month.

Oral Answers to Questions — CHURCH COMMISSIONERS

Bishops' Palaces (Maintenance Costs)

Mr. Tony Banks: To ask the right hon. Member for Selby, representing the Church Commissioners, what are the annual maintenance costs in respect of bishops' palaces. [27703]

Mr. Michael Alison (Second Church Estates Commissioner, representing the Church Commissioners): The annual maintenance cost in 1995

for the 45 diocesan bishops' houses, including the Archbishop of Canterbury's London base of Lambeth palace, was £1,704,000. That figure includes repairs and decorations; other outgoings, such as insurance and water rates; garden outgoings, including gardeners' pay; and the cost of staff accommodation, less incomes from lettings and so forth.

Mr. Banks: Methinks the right hon. Gentleman doth protest too much. I did not know the supplementary question that I would ask until, like manna from heaven, I saw a story in the Daily Mail reporting the new Bishop of Chelmsford as saying that he does not want his new palace—which offers six bedrooms, three bathrooms, staff accommodation and three acres of ground. That is not sufficient for the new Bishop of Chelmsford. Perhaps he should remember the words of Matthew, chapter 19, verse 24:
It is easier for a camel to go through the eye of a needle, than for a rich man to enter the kingdom of God.
If a manger in a stable was good enough for the Lord, whingeing from the princes of the Church is not good enough for us.

Mr. Alison: The hon. Member for Newham, North-West (Mr. Banks), with almost Gallic fervour, is trying to score a goal in the last five minutes—but he has not succeeded. The good Bishop of Chelmsford occupies a small amount of the accommodation, but the house is impossibly close to the A12 dual carriageway and one cannot hear oneself speak, think or pray in the palace. It would be a good thing if the bishop found better accommodation.

Mr. Garnier: If the hon. and saintly Member for Newham, North-West (Mr. Banks) is so concerned about the size of bishops' palaces, would not one answer be to open them more frequently to the public so that others could also enjoy this architectural heritage, just as we enjoy the heritage of our other great buildings?

Mr. Alison: Yes. My hon. and learned Friend makes a good point. Of the 45 diocesan bishops' residences, only 11 can properly be described as having an historic background. Of those 11, Auckland castle, Hartlebury castle and the palace of Wells are already open to the public; and I believe that the Archbishop of York is seeking to open up Bishopsthorpe in York. My hon. and learned Friend's point is well taken, therefore.

Residential Property

Mr. Simon Hughes: To ask the right hon. Member for Selby, representing the Church Commissioners, what is the number of residential properties that are owned by the Church of England and not currently designated for use by clergy; and if he will place a list of the properties in the Library. [27705]

Mr. Alison: The Church Commissioners do not keep central records of Church of England properties that are not currently designated for use by clergy. Each diocese keeps a record of the property it owns and of clergy's houses, and of whether they are empty or occupied. The Church Commissioners own, as part of their investment


portfolio, a total of 3,720 residential units. In view of the number of these properties, it would not be practicable to place a list of all of them in the Library.

Mr. Hughes: Given the large number of people who are without housing, temporary or permanent, will the right hon. Gentleman make inquiries, if necessary diocese by diocese, so as to satisfy hon. Members that these properties are being made good use of? During the period between one incumbent leaving and another taking up his post—often as long as six months or more—and on any other occasions when properties are not used for Church members of staff, they should not be left empty. Instead, they should be offered, short term, to meet people's

housing needs so that the Church's residential property is at all times full and used to house people who might otherwise have no house.

Mr. Alison: As I have said, that is the responsibility of the parishes and dioceses, but I shall see that the hon. Gentleman's observations are passed on to them, in view of his interest in the matter.
It might just be worth pointing out that of the 3,720 residential units for which the Church Commissioners have a direct responsibility, only 24 are currently vacant; of those, 18 are under offer for sale on long lease or short letting. We are anxious to pursue exactly the course that the hon. Gentleman advocates.

Points of Order

Mr. Derek Foster: On a point of order, Madam Speaker. I fear that the Parliamentary Secretary, Office of Public Service, who I see in his place, inadvertently misled the House when winding up the debate on the civil service pension scheme on Tuesday 7 May. At column 130 I said:
Is not the real reason the Government's wish to privatise Paymaster? Without the order, a privatised Paymaster could not tender for the contract. Without that substantial contract, Paymaster would be a far less attractive proposition for privatisation.
In his closing speech, the Parliamentary Secretary said:
That has nothing to do with the payment of pensions to former civil servants. The proposals in the order concern entirely the administration of the scheme for current civil servants and are nothing to do with Paymaster's function of paying out benefits and pensions to retired civil servants."—[Official Report, 7 May 1996; Vol. 277, c. 130–36.]
The Parliamentary Secretary paid me the courtesy of writing to me to draw this to my attention, but I thought that as he was here answering questions today, he should take the opportunity to put the record straight.

The Parliamentary Secretary, Office of Public Service (Mr. David Willetts): Further to that point of order, Madam Speaker. I confirm that the order which the House approved last week does cover all aspects of the administration of civil service pensions. I regret that my winding-up speech did not make that point clear. As you know, Madam Speaker, I have placed in the Library of the House a copy of my letter to the right hon. Member for Bishop Auckland (Mr. Foster) which clarifies the point.

Mr. Anthony Steen: On a similar point of order to that of the right hon. Member for Bishop Auckland (Mr. Foster), Madam Speaker. At last Thursday's oral questions, my hon. Friend the Minister of State, Ministry of Agriculture, Fisheries and Food was recorded as saying that an oyster farm in my constituency had been closed because of an
unacceptable risk to human health."—[Official Report, 9 May 1996; Vol. 277, c. 361.]
That is not the case, because the farm meets the requirements of the European directives, but did not comply with the gold-plating by MAFF officials. I wonder if the attention of the Editor of Hansard could be drawn to that fact.

Madam Speaker: Perhaps the hon. Gentleman would also like to draw his point to the Minister's attention. It is hardly a point of order for me, but it is a matter for the Minister.

Mr. Denis MacShane: On a point of order, Madam Speaker. Have you had any information from the Department of Trade and Industry about a statement on the announcement by the gas regulator that some 10,000 British Gas TransCo jobs, many of them located in my constituency, may go as a result of her arbitrary new pricing decision? Frankly, the consumers and the employees of British Gas are caught between Cedric the pig and the unaccountable Clare "Spotted-dick"—

Madam Speaker: Order. That is not a matter for me. If the hon. Gentleman wishes to raise that matter on an Adjournment debate, I shall be glad to consider any application he makes. All hon. Members know that if a statement is to be made by the Government, a notice appears on the annunciator screen by 1 o'clock so that we are all aware of it.

Mr. Robert Key: On a point of order, Madam Speaker. We were all grateful to you for your statement on 19 January 1995 in response to a legitimate complaint from the hon. Member for Southwark and Bermondsey (Mr. Hughes). In that statement, you said that
a Member whose constituency is directly affected by an answer should be informed of the answer at the same time as the Member who has asked the question and the press.
You also said that
It would also be a useful courtesy if any Member tabling a question directly affecting another's constituency—something which should not be done lightly in any case—took care to inform that Member of the action that he or she has taken."—[Official Report, 19 January 1995; Vol. 252, c. 862.]
This morning, I had a two-and-a-half-hour meeting with the staff of Salisbury tax office to try to stave off its closure by the Board of Inland Revenue. The staff told me at 12.30 today that a parliamentary question had been tabled by the hon. Member for Gordon (Mr. Bruce). Despite my parliamentary questions and ministerial correspondence, he felt it necessary to do that. He did not inform me and I confirmed with his office as soon as I arrived in the Palace of Westminster that he had not sought to inform me. The hon. Gentleman tabled five parliamentary questions about my constituency without contacting me. If he had, I would have advised him to get in touch with the right hon. Member for Yeovil (Mr. Ashdown), whose tax office is also threatened with closure.
Will you, Madam Speaker, confirm the views that you expressed in January 1995?

Madam Speaker: The hon. Gentleman has given the House the date when I made that statement and the column reference, which is 862. That statement still stands and it is very firm. Members who table a question directly about another Member's constituency, which should not be done lightly, should in any case take care to inform the other Member in advance that they are going to do so. Such matters should be resolved between Members and should not come to the Chair of the House, especially after firm statements have been made about how we should conduct ourselves in the Chamber.

Mr. Simon Hughes: rose—

Madam Speaker: Is the hon. Gentleman going to apologise for his colleague?

Mr. Hughes: I have not spoken to my colleague, but may I accept what you say and explain one point to the House and to you, Madam Speaker, which may require you to adjudicate again and we may be able to respond in the way that you have indicated? My assumption is that my colleague, who is our Treasury spokesman, will have asked questions about a tax office in—

Madam Speaker: Order. That is not a point of order. I made it clear in 1995 that if questions are to be asked, which should not be done lightly, the Member should be informed. The hon. Member for Salisbury (Mr. Key) was informed about the questions when he saw them on the Order Paper. That is not the way to behave. I will hear no more points of order about that matter because every Member knows how strongly I feel about it. We shall now get on with our business.

Opposition Day

[12TH ALLOTTED DAY]

Northern Ireland Economy

Sir James Molyneaux: I beg to move,
That this House takes note of the Northern Ireland Economic Council's Report No. 118, February 1996.
The report named in our motion is an assessment of the implications of the 1995 Budget on Northern Ireland. Lest anyone should assume that I am going to plead a special case for our part of the United Kingdom or, worse still, advocate a separate tax regime for the Province, let me make it clear that my party accepts some responsibility for that Budget. During the debate on the Queen's Speech on 22 November 1995, I ventured to tender advice to the Chancellor of the Exchequer, who was then reaching his firm and final decisions on the contents of his Budget. My subsequent support during the Budget debate for the Chancellor's proposals was in line with my party's consistent policy since it was forced to become a separate party in Parliament.
We are in the happy position of finding ourselves broadly in alignment with the Treasury team in reducing the national debt, reducing the public sector borrowing requirement, maintaining the Government's excellent record on low inflation and avoiding a fixed exchange rate. On that final issue, my party's policy pre-dates the debate on a common currency. Our policy is based on a firm conviction that although a common currency can work within a nation—an example was given recently by the right hon. Member for Wokingham (Mr. Redwood), who observed that the economies of London and Liverpool are vastly different, with the former giving assistance to the latter—a uniform currency for sovereign nations flies in the face of common sense. As a party, my colleagues and I derive reassurance from the convergence of the Government and the Opposition on most of the principles to which I have referred, and economic policies.
I have sketched in the national background to our financial structures so that we can examine the position of one part of the nation, which in this instance is the Northern Ireland component. In examining budgetary effects on Northern Ireland, we must look beyond the current year to the decade ahead. One Budget is little more than a blip; it represents a modest shift in balance which has a limited effect, in the long term, on the nation or any part thereof. That is not to say, however, that we should ignore the fact that even a tilt of a few degrees can seriously damage any one of the regions of the United Kingdom.
It is in that sense that the report of the Northern Ireland Economic Council reveals an unnoticed and probably unintentional disadvantage to the Province. The report observes that while newsworthy proposals such as duties on petrol, cigarettes and alcohol are highlighted, the distributional impact on incomes is rarely discussed.
There is an assumption that the Northern Ireland economy is a microcosm of the United Kingdom economy. The report renders a service in illustrating the fallacy of that assumption. Incomes in Northern Ireland


are lower than those in the rest of the United Kingdom. For a variety of reasons, the social security system is a more significant source of income than it is elsewhere in the United Kingdom.
Sir George Quigley, the chairman of the economic council, has stated:
Given that the changes announced in the Budget tend to favour high earners and that the level of household income is on average lower in Northern Ireland than in the United Kingdom, it is not altogether surprising that Northern Ireland households benefit less from the tax and benefit changes contained in the 1995 Budget than their United Kingdom counterparts.
I am not advocating split-level taxation. However, given Sir George's assessment, which points to a loss to the Northern Ireland economy in total, there is a case for taking the factor into account when the Chief Secretary to the Treasury embarks on his consultations before setting out his public expenditure proposals, and especially the Northern Ireland allocation.
It might be appropriate to note the concern expressed over public expenditure plans for the next three years. Whatever Government are in power, the closing years of the century will see a tightening of resources. If the undesirable effects of that are to be avoided and if the targeting of social needs is to achieve its objectives, we must embark on a concerted drive to achieve lasting long-term expansion of the Ulster economy.
Given the inevitability of continual reduction in public finances throughout the years to come, greater use must be made of the public finance initiative. We have already seen examples of capital projects launched well in advance of the date when public finance would be available. I accept that the move from being a service provider to being a purchaser of services places the Government in a position in which they may be replacing a short-term capital commitment with a long-term revenue commitment, but I have great faith in the private sector—particularly in Northern Ireland—and I do not think that it is beyond the capacity of that sector to design measures to avoid that very trap. For the Government, the great bonus is the easing of the pressure on the public sector borrowing requirement, on which we are all broadly agreed in the House.
In a recent study, our party proposed a merging of the various agencies that deal with indigenous business. We suggested that the Industrial Development Board should be encouraged and assisted in its role of attracting inward investment. When I use the words "encouraged and assisted", I am thinking particularly of the back-up structure that has been considered by Northern Ireland Ministers during past months, in the shape of an all-party council based in both Houses of Parliament. We would strongly support such a system, which would have enormous influence abroad and would put Northern Ireland's industrial capacity in the front rank. Nearer to home, there is much scope for co-operation. Without prejudice to England and Wales, we are planning to step up links with Scotland, our nearest neighbour—so near, indeed, as to be visible across the narrow sea.
Let me interrupt my train of thought at this point, and mention another hobby horse of mine—the enterprise investment scheme that was introduced in the 1993 Budget. The object of the scheme was, and still is, to encourage small investors to support small companies. It has great potential in Northern Ireland, but there should and could be a much greater take-up. Perhaps it could be

facilitated by a degree of security for investors. I know that that kind of step may prove difficult, but it should not be impossible. If it proves difficult, perhaps more attractive tax concessions would have the desired effect—throughout the United Kingdom, that is.
For the benefit of the hon. Member for Greenock and Port Glasgow (Dr. Godman), let me return to the subject of Scotland. My hon. Friend the Member for East Londonderry (Mr. Ross) returned yesterday from a duty visit to Glasgow, and I was privileged to engage in discussions there during two weekends in April. Never was the Scottish dimension as real as it has been in recent weeks, with Scottish and Ulster farmers making common cause in the beef crisis. On behalf of my colleagues, let me pay tribute to the hon. Member for Banff and Buchan (Mr. Salmond), who has worked closely with my hon. Friend the Member for East Antrim (Mr. Beggs) in taking steps to ease the plight of beef farmers on both sides of the Irish sea.
The Scottish dimension is based on a common sense of values, on mutual understanding and on hard-headed business expertise and experience. There is no need for cross-channel structures; no clamour to find a solution. Ulster's relationship with Scotland provides a perfect example of two peoples united, not divided, by the sea, and existing in an atmosphere of trust and friendship. We hope that, sooner or later, we can develop the same relationship with the nation on our southern frontier.

Dr. Norman A. Godman: The right hon. Gentleman has spoken of the relationship between Northern Ireland and Scotland. What does his party think of the idea of a ferry service linking Ballycastle with Campbeltown and the Mull of Kintyre? The town and the Mull of Kintyre would definitely benefit economically from such a link.

Sir James Molyneaux: We have always supported that project and I think that that applies to my colleagues on the Benches in front of me. We will do anything that we can, again in co-operation with our friends in Scotland, to bring it about because we take the view that the more numerous, effective and efficient the links are between Scotland and Northern Ireland, and thereby between Great Britain and Northern Ireland, the better it will be for both our countries.
We hope that, sooner or later, we can develop the same relationship with the nation on our southern frontier, which left the United Kingdom earlier this century. Some day, the path of reunification of the British Isles may become a reality—and, if it does, we really will have a common currency that would work—but that course may become realistic later this year, when the latest initiative, misnamed the "peace process", has run its course.
That is not to suggest that those of us without ringside seats at that circus should stand around with bated breath. Far from it—we have a continuing duty to co-operate with the Government, the Opposition and the other parties in this Parliament to ensure that the work of the Queen's Government continues before and after a general election. It is that continuing certainty that will, more than anything else, create stability and settled conditions, which in turn will vastly improve the economic prospects for Northern Ireland and the United Kingdom, to which the greater number of Protestants, Roman Catholics, people of other faiths and of none wish simply to belong.

The Minister of State, Northern Ireland Office (Sir John Wheeler): I congratulate the right hon. Member for Lagan Valley (Sir J. Molyneaux) on the way in which he introduced the debate. I listened with interest to what he said and I look forward to the contributions that will follow. The Government share the view that the matters discussed in the Northern Ireland Economic Council report are of great importance to all the people of Northern Ireland. It is therefore a subject worthy of careful debate.
I welcome the right hon. Gentleman's remarks about low taxation and inflation. I am not sure, however, whether this afternoon's events will confirm his belief that there is a complete convergence between Her Majesty's Opposition and the Government on the economy's management, but that will perhaps be revealed to the House later.
I should like to take this opportunity to express the Government's appreciation of the council's work—not only the report under consideration, but the wider body of reports that it has produced over the years. The council was established by Government as an independent advisory body in 1977. Over the years, it has exercised its independent role effectively and it continues to be a valuable source of external comment and advice. The Government find its contributions a useful and thought-provoking stimulus to the process of policy formulation and review, although, naturally, we do not always agree with all its analyses and recommendations.
On 31 March, I wrote to Sir George Quigley, the council's chairman, to express our thanks for the report on the 1995 Budget and its implications for Northern Ireland. In doing so, I was pleased to acknowledge that the report provides useful summaries of the background to the Budget, as seen from both the national and regional perspectives, and of the economic characteristics of Northern Ireland households, to which the right hon. Gentleman has referred.
I was encouraged to note the council's overall conclusion in paragraph 6.8 of the report that the net effect of the expenditure and tax changes in the Budget is likely to be "slightly expansionist" in terms of the Northern Ireland economy and that that should "enhance growth opportunities". Right hon. and hon. Members will doubtless wish to comment on a number of points in the report, and it is worth reminding ourselves of the background.
Recent trends in the Northern Ireland economy have been extremely positive. Unemployment has fallen over an extended period and employment is at is highest ever level, although those are not the only encouraging signs. The council's report recognises that the Northern Ireland economy has performed better than the United Kingdom economy as a whole on a number of important indicators. Given the relative positions that have obtained in the past, this is to be warmly welcomed.
It is a statement of the obvious, but no less relevant for that, that the restoration of the Provisional IRA ceasefire and progress towards political development would have immensely beneficial effects on the Northern Ireland economy. No one can be unaware that violence has had an appallingly destructive effect on the Province's economic development over the past 25 years. That is why we continue to do all that we can to encourage political

progress, and it is why the whole community looks to all parties and interests to create the peace and stability which are the essential prerequisites for economic growth. I am sure that my right hon. Friend the Minister of State will say more about this when he responds to the debate.
I have a particular interest, because of my responsibility for the Department of Finance and Personnel, in what the council's report says about public expenditure. The background to its comments on public spending is well known, but they bear repetition. Northern Ireland's needs have been and continue to be higher than the rest of the United Kingdom's, and that is recognised in the higher levels of public expenditure in the region. The comparisons are not always straightforward and need to be treated with some caution, as the report acknowledges, but identifiable public expenditure in Northern Ireland was some 32 per cent. higher in 1994–95, the last year for which the comparison is currently available, than the UK average.
That is a very broad comparison, but it none the less confirms that there is a substantial, although I believe justifiable, differential in recognition of the region's particular circumstances. There are, for instance, proportionately very high levels of expenditure on law and order and industrial development, as one would expect, given the events of the past 25 years.
The report refers to the fact that the Northern Ireland allocation for the current year, 1996–97, is over £8 billion. That is a substantial allocation in the context of the need for tight control over public finances. The report also notes that planned savings in the law and order budget resulting from the paramilitary ceasefires—totalling some £286 million over the period 1995–96 to 1998–99—have been reallocated within the Northern Ireland bloc rather than subtracted from it.

Dr. Godman: The Minister mentions the reallocation of funds. Does he support the idea of a ferry service between Ballycastle and Campbeltown? Naturally, I would prefer such a service to link with Greenock, but in the meantime I would happily settle for a service between the Mull of Kintyre and Northern Ireland.

Sir John Wheeler: The principle of such a service is interesting and it is almost certainly desirable. The question of how it would be funded would have to be carefully considered. I am, of course, aware of the degree of concern there is among the residents of Rathlin island and of Ballycastle about their ferry service. Those matters have to be looked at in the round and with very great care as to the implications for public expenditure.
The amount of money redeployed as a result of the terrorist ceasefires is some £286 million, which is a substantial demonstration of the practical effect of the Prime Minister's undertaking in October 1994. The Government will take full account of Northern Ireland's special needs in setting levels of public spending for the Province.
The tragedy is that those reallocations, which the report refers to as the public expenditure element of the peace dividend, are at risk because of the breakdown of the Provisional IRA ceasefire. My right hon. and learned Friend the Secretary of State made it clear, in announcing the outcome of the 1994 and 1995 public expenditure surveys, that the reallocations to economic and social programmes were necessarily contingent on the working assumption of peace.
The reallocations would, self-evidently, have to be reversed if expenditure on police overtime and compensation were to rise towards their previous levels. If that were to happen, those responsible for terrorist violence would effectively destroy jobs as well as depriving the health service, the education service and all other programmes of resources that could be applied to the benefit of the whole community. The people of Northern Ireland would not forgive them for that.
Sir George Quigley's foreword makes it clear that the report was completed before the breakdown of the PIRA ceasefire. He rightly observed that the economy was beginning to
reap significant benefits from the prospect of a permanent and durable peace",
and emphasised the need to search for a solution that will consolidate and enhance the gains made during the period of the ceasefire. I endorse those sentiments and re-emphasise the Government's commitment to that search.
The report also suggested that there should be a debate about public expenditure priorities in the context of peace and stability. I earnestly hope that the situation will develop in ways which make that debate relevant, and I am sure that the Government will play their part in it. My right hon. Friend the Minister of State, Northern Ireland Office may say more about the report's comments on targeting social need when he speaks later.
The right hon. Member for Lagan Valley also spoke about such targeting. I entirely agree with his remarks about taking full advantage of the private finance initiative, and I can assure him that the Government are actively examining the possible use of PFI projects in sectors including water and sewerage, health, education, roads, transport and information technology.
On the broader focus of the council's report, it is indisputable that the economic well-being of Northern Ireland is intimately linked to the performance of the United Kingdom economy. The 1995 Budget was a carefully balanced package designed to protect and promote growth in the UK economy. It included a reduction in the basic rate of income tax, lower tax on savings income, an increase in the lower-rate band well ahead of inflation and continued tight control of public expenditure.
The Budget was designed to put money back into the pockets of ordinary taxpayers—to let them keep more of what they earn and what they save. That was as welcome to taxpayers in Northern Ireland as to taxpayers in Great Britain. It was also designed to keep inflation under control, as that is a key to protecting the economic interests of the entire population.

Sir James Molyneaux: Does the Minister realise that I was, in a sense, throwing him a lifeline when I suggested that it should be drawn to the attention of the Chief Secretary to the Treasury that the United Kingdom and Great Britain have many more high earners per 1,000 of the population than we have in Northern Ireland and that the benefits accruing to the economy on the bigger island are therefore much greater? It is a rather delicate suggestion but perhaps it might be of some help to him when he is bargaining, not for an enhanced slice of the cake but for a fair share of the cake when it comes to the carve-up in the autumn.

Sir John Wheeler: I was especially grateful to the right hon. Gentleman for the courteous and careful way in which he threw the lifeline and assure him that his fine words will be enthusiastically deployed along the line that he suggests in the coming debates at the Treasury.
I emphasise the fact that we have continued to sustain Northern Ireland public expenditure at levels which take account of the region's unemployment and other problems. This manifests itself in a number of ways. We continue to commit substantial resources to industrial development including inward investment; we have large training and employment programmes and have been piloting a scheme for the long-term unemployed; and the social security programme is running at some £3.1 billion in the current year. Our policies therefore address the whole community, not only those in work.
The report refers to the council's intention to stimulate a debate on the degree of fiscal autonomy that regional governments might have. Clearly, this is a legitimate area of public discussion and the Government will follow the debate with interest. I must point out, however, that the unified taxation system has served Northern Ireland well over the years, and the report itself acknowledges that the Province continues to benefit from substantial fiscal transfers within the United Kingdom system.
I would therefore argue that Northern Ireland's interests need to be judged in the light of all the relevant factors, and in the round, rather than on a piecemeal, measure-by-measure basis. If that broader assessment is made, I believe that it is clear that the Province is treated fairly while still being subject to the same disciplines and constraints that apply throughout the United Kingdom.
To sum up, the Northern Ireland economy has performed well in recent years. There have been a number of welcome successes on the industrial development front over the past year, and we have recently seen substantial private sector investment in new hotels. I am sure that all contributors to this debate will share our wish to see those trends continued, and I look forward to a constructive debate on the important issues raised by the council report.

Mr. John Hume: I should like to express my deep appreciation to the right hon. Member for Lagan Valley (Sir J. Molyneaux) for putting this matter on the agenda as it deserves a great deal of discussion at this particular time, given that there is substantial common ground among the various parties in Northern Ireland. I wish to deal first with a subject which the right hon. Gentleman mentioned and which is causing a serious economic crisis in our community, but which has not received sufficient attention: bovine spongiform encephalopathy.
BSE has created one of the worst economic crises in the lifetime of our citizens. Unlike in other regions of Britain, agriculture is our largest industry, and the community as a whole, but especially rural towns and villages, is heavily dependent on it and on the beef industry. We believe that we have a special case and that the problem in Northern Ireland is very different from that in Britain. For example, the incidence of BSE in Northern Ireland is less than one tenth of that in Great Britain. The rate of incidence of BSE in Northern Ireland has been declining rapidly, and international observers have agreed


that measures taken to control it have been extremely effective. The farm quality assurance scheme in Northern Ireland provides an effective guarantee that beef that is given that assurance is free from BSE and from BSE-free herds.
The computerised tracing system that operates in Northern Ireland is regarded as one of the most advanced in the world. It ensures that every animal can be traced from birth to slaughter. That enables the strictest possible control to be exercised over cattle. Other regions have much to learn from the forward thinking of people in Northern Ireland's agriculture and beef industries.
There is a powerful case for special status for Northern Ireland, to be put to the Council of Ministers and the European Commission, given our dependence on the industry and the special relationship that I have just described. I appeal to the Minister—as he knows, my party and the Ulster Unionist party have put this request to him before—to reconsider putting that case directly to the Council of Ministers.
With regard to the broader political scene, I agree totally with the Minister that peace on our streets has an enormous role to play in developing our economy, given what we have lost over the past 25 years because of the violence and troubles. The 18 months of peace demonstrated the mood that has developed and the opportunities to translate the massive international good will, which has clearly emerged in Europe and the United States, into real benefits at an economic level for our people. There is a major opportunity to do that and I hope that there will soon be a restoration of the ceasefire so that, in that totally peaceful atmosphere, all our energies can be harnessed to aid economic development.
As I said, there is substantial common ground among the different parties in Northern Ireland on the economy. Indeed, when the right hon. Member for Lagan Valley was leader of the Ulster Unionist party, we met, and our parties met, and we began a process to discuss matters of common interest. I certainly hope that, as the peace process and the talks process continue—we all recognise the difficulties in the political arena—we shall work closely together on the economy to develop the trust that will help us in the more difficult political field.
In working together on the economy, we have an enormous amount of international good will on which to call to help us build economic success. As we know, the European Union has designated a special programme of development for Northern Ireland. Through its President and at every level, right across its communities, the United States has expressed its enormous willingness to help us on the economic front.
There are two major areas in which we can take advantage of that enormous good will of the United States—marketing the products of our indigenous small companies and seeking inward investment. I have some experience of both of them in my constituency, because we set up a local body, whose members are drawn from both sections of the community, to market the products of our small companies in America, using our contacts there, and to seek inward investment.
As the Minister knows, there has been substantial recent success. We have attracted 2,500 jobs into my constituency from the American investment, and using

that international good will over the past few years, initial orders from the 200 small companies from all sections of Northern Ireland that I have taken to the United States to market their products, have been worth £42 million. That underlines the enormous opportunity that is now out there for us, to harness the massive international good will and sympathy for our situation in Northern Ireland. A ceasefire is, of course, an essential element in greatly strengthening that good will and sympathy, so that real benefits for our people are created through the marketing of our small companies' products and inward investment.
As we know, the European Union has designated a special programme for us. When the peace process started and United States representatives and the late Secretary of Commerce were offering us economic assistance, my party and I suggested that, as other countries have it as part of peace processes in other parts of the world, they recognised Northern Ireland and the border counties as a duty-free zone for imports into the United States. I understand that that proposal is being seriously considered and I know, from my personal contacts, that there is substantial support for it in Washington. That would give Northern Ireland an enormous boost.
Other regions might think that Northern Ireland is getting an advantage. However, we are trying to cure the disadvantage that we have had over the past 25 years. If we can persuade the American Senate and Congress to give us that duty-free status—as a result, products made in our area would be imported duty free into the United States—it will be an enormous boost to our industrial development. We have the potential to achieve that status if the Government support us in our request to the United States—I hope that they do.
As I said previously, I hope that we shall work together on common ground in relation to our economic future, both in Europe and in the United States, to bring the economic benefits to both sections of our community and to break down the barriers of prejudice and distrust that stand between us in the more difficult political arena.

Mr. A. Cecil Walker: As one who was born and brought up in Belfast, I am proud that it is again defining fresh frontiers of industrial, economic and social achievement. Towards the close of the previous century, Belfast was the source and centre of a high-volume flow of new technologies and materials. It transferred goods to the furthest corners of the globe. Its first factories were the largest and most advanced spinning and weaving mills of the time, using the finest cloths and linens.
Commodities and people were exported abroad on ships that were built in Harland and Wolff. The fastest and most luxurious ocean liners were first thought of, and subsequently designed and constructed here. The city became a location for entrepreneurs who managed, manufactured and marketed their ideas, their products and their talents to Europe, to the far east and to America. Many of them became part of the great wave of emigrants who left for the shores of the United States in the 19th century.
Today is a new time, with new opportunities. Once again, Belfast is resuming its place as a driver of economic regeneration and growth. Ambitious projects for the transformation of established areas within the city—such as the Gasworks, Springvale and Laganside


developments—are providing imaginative investment opportunities. Schemes such as the development of Lagan weir and Clarendon dock are being undertaken by Laganside Corporation and are ensuring that the river's significance is not posthumous, but progressive; not former, but future.
That physical development is another sign of the city's increase in capacity and of its confidence in itself. Laganbank is a superb example. It is an entirely new development, which will cost approximately £130 million and which will be completed, appropriately, in 2000. The main elements include a 2,250-seat conference and concert hall, signifying the close relations between commerce and culture in the city; a 1,350-space multi-storey car park; a 200-bedroom four-star hotel; 500,000 sq ft of office space; and 70,000 sq ft of speciality and festival shopping.
Another example of Belfast engineering at its finest is the imposing £65 million cross-harbour bridge, named after William Dargan, who built the first rail bridge in Ireland. The Dargan bridge is a clear demonstration of the city's commitment to maintaining and developing the kind of up-to-the-minute transportation and communications network essential for companies seeking access to or seeking further to consolidate their position in the international fast lane of modern industrial economies.
Belfast is a city that is constantly reinventing itself in terms of its workplaces and work forces. Companies such as Ford, whose commitment to Belfast spans many years, have been joined by investors from Britain, Europe, North America and the Pacific and Asian countries, who realise the benefits of a flexible, well-educated and motivated population of 300,000 people from which to recruit their personnel.
Belfast is the nexus for a transport and communications infrastructure unrivalled by any European city of equivalent size. A major freight port with a brand new terminal and a roll-on/roll-off facilities, Belfast is also connected by an excellent motorway and trunk road system to every other port in Northern Ireland. The main railway station integrates the whole of Northern Ireland, and there are two major airports with links to Great Britain, Europe and America. Passengers and products can easily be transported to any of those areas.
Belfast is a young city on an ancient site, and its local and global importance has always been linked to its position as a centre of communications and capital. Many of its past industries were linked to the transport of goods, of ideas and of technologies. Shipbuilding is the first and most obvious example, ropemaking a related second and the design and construction of light aircraft a more recent third. The manufacture of linen, which consolidated Belfast's significance as a major city in the 19th and 20th century, would have been unimaginable without the port and harbour that link it to world markets.
Times have changed. The industrial revolution, which laid the foundation for Belfast's sphere of influence, shaped its architectural profile and created the wealth of many of its citizens, has been superseded by a new information age.
Ironically, Belfast has figured once again as a centre of public communications networks, for the past 25 years have put it firmly in the spotlight of international media attention. Nevertheless, during much of that period there

has been a relentless, if understandable, decline in investment activity, industrial growth and stability of employment.
Identifying problems is one way of helping to eradicate them. Although the legacy of problems confronting Belfast is by no means likely to disappear overnight, there is no reason to suppose that they are any more difficult than those of any other major European city.
In its key document, "Opportunities for All", Belfast city council outlined an economic development strategy for the years 1995 to 2000, in which it pinpointed information as the lodestone of a new gateway to and prosperity for its citizens. It was felt that Belfast was in a position to promote itself once again as an urban and national business for a global network of public and business intelligence and information systems.
Obviously, the term "information" is the site for many competing definitions and applications. What do we mean when we speak of Belfast as a city of information? To start with, Belfast has an established and worldwide reputation for the accuracy, low-cost production and high integrity of its software development industries. They have evolved so rapidly in the past decade that they provide employment for 10,000 people, and trends suggest that they have the potential to increase that figure substantially.
One of the side effects of having access to the idioms and technology of software development is an increasing dispersal of expertise and energy into the associated fields of interest, with the result that Belfast has become a centre of excellence for the generation of information networks, which helps business concerns to compete and operate more cost-effectively.
Telematics is another area of research and production in which Belfast has specialised recently. Defined as the integration of telecommunications and computers in a way that suits business requirements, telematics merges the practicalities of software development with the latest advances in computing intelligence, to facilitate the free exchange of information between computers on a local and wide area network. The development and production of the means of enabling extensive electronic links situates Belfast firmly on the frontiers of the new planetary map of information science and industry. We are building on the extensive computer training programmes put in place by the Government.

Mr. William Ross: Does my hon. Friend agree that one of the best features of the telecommunications and computer industries is the fact that they employ many new graduates? For far too long, we have exported our best graduates and our best brains and now, for the first time in many years, many of them are able to find jobs at home. That can only be good for Northern Ireland in the long term.

Mr. Walker: I thank my hon. Friend for those remarks. He is absolutely right about graduates, but other training programmes are training people who are less well educated for work in the telecommunications industry. Those programmes are off the ground in Belfast and they are working well.
Belfast city council, with support from BT, has lent its support to two major training initiatives—we call them EDITRAIN initiatives—in west and in east Belfast,


which are areas of very high unemployment. Anticipating an increased demand for skilled operators in that field—this is relevant to my hon. Friend's earlier remarks about training—the council has approved a procedure whereby individuals receive training up to national vocational qualification standard level 4. That enables them to install and to supervise the smooth running of network information systems as an integral part of a larger corporate team. There are several and substantial markets for such specialist graduates as most companies, large and small, require their services and expertise. Almost all the major banks and insurance companies are part of extensive network systems, which are usually headquartered in London.
Belfast is an information city that has transformed its past into a strategy for the future. That strategy has given its citizens a clear sense of continuity, a coherent set of objectives and a growing confidence in the common goal of a better life for us all. For the business man and woman, the promotion and implementation of the strategy in the form of specialised training, consultative bodies and a climate of information literacy and technological competence, represents new frontiers of economic opportunity. There is already a talented and motivated work force. Low-cost accommodation and telecommunications, combined with the development of both satellite and terrestrial broad-band services, will assist the economy dramatically.
One of Belfast's most striking features is the number and range of organisations that are active in the field of economic development. In the past 15 years, a complex network of agencies has developed across the statutory, community and private sectors. That reflects in part the changing economic climate and the change in Government policy that promoted enterprise as a means of tackling unemployment, while reflecting also the communities' desire to take some action to create work.
Within the statutory sector, the Department of Economic Development family—the Local Enterprise Development Unit, the Industrial Development Board and the Training and Employment Agency—has invested heavily in infrastructure, training and business support in order to promote a positive environment and to encourage business information and growth. Parallel with that, the Department of the Environment and its agents, the Belfast Development Office and Making Belfast Work, have invested heavily—with MBW particularly prominent through the efforts of the Belfast action team. Complementing that, development at community level is evident through the establishment of local and enterprise agencies, community employment regeneration schemes and development organisations. The International Fund for Ireland was a prime mover in that. Further activity is generated by organisations that are more closely aligned to the voluntary and community sector, where youth, women's enterprise and community economic development initiatives can readily be found.
A case in point was the recent conference held at the Balmoral conference centre and sponsored by the Northern Ireland Council for Voluntary Action. More than 175 participants discussed economic and social regeneration involving local people. It was a positive, constructive and bridge-building exercise that was worthy

of support as it addressed specific employment problems, using the imaginative Donnison report, which will be published shortly, as an agenda for action.
Belfast continues to be the centre of economic activity for much of Northern Ireland. Although it has only 18 per cent. of the total population of the Province, it has 30 per cent. of Northern Ireland's manufacturing companies and 21 per cent. of its retail activity.
In the past decade, Belfast has enjoyed massive infrastructure investment that is estimated at approximately £800 million. Projects range from new housing to commercial offices and shopping arcades. Considerable capital has also gone into bolstering the internal and external transport infrastructure, which now ranks with the best in Europe. As I said, the road and rail networks in the Province meet the most advanced national and international standards, but the weak links are the west link junctions, which cause serious traffic and environmental pollution problems, particularly in respect of cross-border containers using Belfast harbour port.
Unemployment continues to be a major problem, and in some wards half the work force is out of a job. The problem is far worse among men, and in some neighbourhoods as many as six out of 10 are unemployed. Although unemployment in Belfast is not as severe as in other parts of the Province, it fares worse than most comparable cities in the United Kingdom. Despite a fall in the population of the city between 1981 and 1991, current trends reveal that the rising youth population entering the labour market is imposing further pressure on jobs.
Within the broad scheme of community economic development, the city council's emphasis clearly will be focused on promoting sustainable employment. At community level, that will be reflected in support for training, capacity building and the promotion of new models of economic activity and employment. In respect of priority groups, emphasis will be placed on programmes and initiatives that encourage and support enterprise and access to employment and improve employability.
On that theme, the city council has set out the following aims: to encourage wealth creation by supporting economic development at community level; to identify and work with priority groups to promote and encourage greater access to employment and enterprise; to promote the spread of good practice and the sharing of experience at community level; and to promote the potential opportunities presented by information technology in providing sustainable jobs at community level. To achieve those aims, Belfast city council will seek to undertake and support programmes in partnership with interested parties, for which full support will be required from the Government and their respective agencies.

Mr. Eddie McGrady: The subject of today's debate is the report on the background and implications for Northern Ireland of the 1995 United Kingdom Budget. It is important to draw the attention of the House to the broad conclusions of that report which have not been mentioned so far this afternoon. The conclusion of part I of the report states, at paragraph 3.28:
Incomes in Northern Ireland are lower than in the UK. Moreover benefits as a source of income are much more important in Northern Ireland. Consequently a budget which aims to finance tax reductions


through reductions in benefit expenditure will have a disproportionate impact on Northern Ireland, particularly if the targets for cuts are unemployment or sick and disabled benefits.
The same theme is found in part II:
If Budget changes were assessed in terms of the Government of Northern Ireland public policy priority TSN"—
tackling social need—
then serious concerns would have to be voiced. Those that gain the most are the better off, while households that are in the lower income deciles actually experience a fall in their income".
The conclusions also indicate that, in Northern Ireland, the richest 10 per cent. of households will gain from the Budget, but that 50 per cent. of households will suffer losses. That may not have come across clearly this afternoon. I want to dwell, for a moment, on that deprivation.
The report's conclusions hide reality and additional deprivation—the deep disparities in areas of extremely long-term unemployment that have existed for not just one, but two, decades. Those areas have also been deprived for more than two decades of the infrastructure necessary to enable them to take advantage of any industrial revival that may occur as a result of inward investment.
Certain areas of Northern Ireland do exceptionally well; others continue to do exceptionally badly. If the Government have a genuine policy of targeting social need, they must address that problem. If there is a loss of 200 to 300 jobs in place A, an emergency team is sent there to see how the area can be revitalised and to attract new investment. In areas of endemic long-term unemployment, no such task force is contemplated. Perhaps it is thought, "They are used to it, so they will not gripe about it," or, "They do not deserve it."
The report also hides the concept of a low-wage economy, which we should not accept. The Northern Ireland economy should be based on maximum efficiency in which the producers of wealth—capital and labour—share equally in the benefits. It should not be low wages that attract inward investment, but a quality work force, quality management and a quality product. Northern Ireland does not want a far east economy that attracts European and north American investment simply to exploit low wages. There is a tendency to sell Northern Ireland as a low-wage economy. We should sell its other attractions, and the wage earner should share in the prosperity that results from inward investment.
The Minister spoke about the peace dividend. I am not qualified to follow the intricacies of the public accounts system, but there is some disappointment in the north of Ireland that the substantial savings made in respect of Northern Ireland's security requirements have not been funnelled into other areas of expenditure. If, as the Minister says, funds were channelled into other areas of expenditure—God help us! If there had been no peace dividend, our education and health systems would have collapsed around us. The Minister who is to reply to this debate knows that we are already running a £100 million deficit in what is called the educational estate—the fabric of the education system. If, as he suggests, money has gone into the system from the peace dividend, that implies that the deficit would have been much greater.
The Minister responsible for health and social services issued his public expenditure statement on 24 February last, claiming an increase of £54 million in his budget;

but he failed to take it into account that £42 million of that was already tied up in required additional expenditure under new legislation—especially that to do with child support and certain renal health requirements. He correctly stated that a 3 per cent. cut was wanted, of which 1.5 per cent. would come from cash and 1.5 per cent. from services. I can tell Ministers that those cuts in services are already being made, and will get worse as time passes.
The Economic Council report states that there is more ill health in Northern Ireland than elsewhere. If this 3 per cent. cut is to be implemented next year, and possibly the year after, there is no doubt in anyone's mind—from consultant to patient—that the system will collapse.
The problem of perception remains: either the peace dividend was not used or, if it was, budgets have been much more severely cut than has hitherto been admitted publicly.
Job creation and inward investment are essential factors in the equation. The Industrial Development Board and, to a lesser extent, the Local Enterprise Development Unit, have done a reasonable job. I have been one of their major critics in the past, not because they are not doing their job but because they do not distribute jobs fairly around Northern Ireland. We hear much in Northern Ireland about fair employment, but it would be better implemented if employment were also located more equitably. Between 1990 and 1995, 43 new enterprises were brought to Northern Ireland—according to the IDB. Sixteen district councils benefited from them, but the three district councils in my constituency received no benefit whatever as far as I can tell and, of the 315 inward investment first-time visitations during the fiscal year 1994–95, only eight came to the south-east, to South Down. That is not an equitable distribution of jobs in an area of deprivation, long-term unemployment and health difficulties. In addition, ours is a rural community that has to cope with the advent of BSE and the onslaught on our fishing industry.
None of this, however, has prompted the IDB, LEDU or the Government to do anything special for my area. The Governments of other countries seem to manage successfully to apportion varying amounts of grant aid; it is even done elsewhere in the United Kingdom. Why cannot the same be done in parts of Northern Ireland?
As for the policy of decentralisation, there appears to be a steady tendency to draw jobs into central Belfast—it seems to act like a magnet—but such jobs are urgently required to sustain rural communities. Moreover, the agency externalisation process, now under way in all Government Departments, is slowly but surely drawing jobs into the centre and away from the periphery. That applies all over Northern Ireland, not just in my area. That, too, needs to be considered in the context of the targeting of areas of social need.
It may be difficult to attract industrial inward development to an area such as mine, but there should be no difficulty about drawing in tourists to the rural areas of Northern Ireland, in the west and the south-east. I am puzzled by the fact that the Northern Ireland tourist board appears to lack the money to implement the policies that it would like to put into effect. Last year—1995–96—the board's budget went mainly on building big hotels. But the average tourist does not want a big hotel, or its prices. He wants a small family-run guest house or bed and breakfast; he cannot afford a posh five-star hotel.
I am talking about our bread-and-butter tourists, not about the flashy conference tourists who never come back. The kind to whom I am referring will return time and again, bringing their families with them. In the year to 31 March, no grant aid was available for small guest houses. Many in my constituency applied, but the door was slammed in their face. Something must urgently be done about the shortfall of accommodation for tourists in our area. Last summer, there was not a spare bed to be had, and we had to send people across the border. That is criminal.
Industrial inward investment, tourism and indigenous expansion are the three pillars on which we hope to build a better future. As far as the first goes, we must do something about the cost of energy. The Northern Ireland Committee looked into the problem in some detail last year and issued a report, but we seem to be hidebound by rules and regulations and by contracts entered into up to 2010. The officer who controls prices must therefore take immediate action to make inward investment in Northern Ireland much more attractive.
I shall end by renewing my plea not to turn Northern Ireland into a low-wage economy. We need an economy based on a standard quality of production and greater efficiency. That is the best way to attract inward investment.

Mr. Eric Illsley: Right hon. and hon. Members on both sides of the House have agreed today that progress in the peace process in Northern Ireland will be greatly assisted by progress in economic development in the Province. Unemployment, although now falling, has been at high levels and long-term and youth unemployment need to be addressed as they are still problematic. Training for work is another area in which progress must be made. Post-16 academic achievement in Northern Ireland is among the highest in the United Kingdom, but a substantial number of 16-year-olds leave school without any qualifications whatever. Training and education are especially important to counter any drift into violence or into the black economy.
As we have heard already, much progress has been made recently. Inward investment has brought new jobs to Northern Ireland, especially that by the companies Seagate and Daewoo, and in 1994–95 the Industrial Development Board successfully negotiated 10 inward investment projects, which promise to provide almost 2,000 jobs. The Local Enterprise Development Unit helped with about 13 new businesses and another 2,500 new jobs. I shall expand on some of the issues that I have just mentioned, especially training, education and unemployment, and suggest some of the Labour party's policy options to deal with them. I shall also refer to one or two other major problem areas, which have been touched on, including the beef industry and electricity prices in the Province.
Some 97 per cent. of businesses in Northern Ireland have fewer than 50 employees, so the small business sector is extremely important. Encouraging small businesses to start up, to expand and to take on new employees is a key factor in generating growth in jobs and income. The Labour party has been examining ways

in which to assist small businesses, including the establishment of a network of commercially managed business development agencies for small businesses, which would raise private finance for long-term investment in small and medium-sized businesses, and a moratorium law, which would give small firms in financial difficulty the time to develop a rescue package and avoid unnecessary bankruptcy. We have also been examining ways in which small businesses can be saved from the dangers of late payment, together with measures to promote prompt payment and greater accountability on the part of public and private sector bodies. It is apparent that the Deputy Prime Minister does not share that attitude. Raising the VAT threshold for small businesses, if they take on a young, unemployed person, is another issue that the Labour party has been examining.
The latest figures from the Department of Economic Development show that, although some 29,000 people currently attend training schemes run by the Training and Employment Agency, more than 8,000 places on training schemes have not been filled. Why are those places remaining unfilled? Are the Government providing the training courses that business and industry actually require? In Northern Ireland, as in the rest of the United Kingdom, people are the country's greatest asset. Labour believes that the skills and abilities of the work force—a well-motivated, well-trained and well-qualified work force—will determine the Northern Ireland economy's ability to compete in the modern world.
It has been said in the past that nothing short of a skills revolution is required in Northern Ireland. That skills revolution requires that education and training move to the centre of economic policy. Northern Ireland needs an education and training system that enables all workers to retrain continually throughout their working lives. That will require a great expansion in education and training measures. The Government's approach—of leaving training to be developed by market forces—has, to a large extent, failed.
Labour's proposals on training will include new opportunities for retraining for people in work by ensuring that companies invest in upgrading the skills of their work force. Companies that fail to train to a certain standard will face a training levy. That factor has been highlighted recently by the problems experienced by Shorts following the collapse of Fokker. The economy in Belfast and Northern Ireland is likely to lose a number of skilled workers unless those who are made redundant from Shorts are retrained and their skills saved.
We propose a Northern Ireland skills audit that will be compared with information available for the whole island of Ireland to identify the skills that are in short supply so that training resources can be targeted on removing bottlenecks and providing the skills that are most likely to lead to employment. We propose to encourage public-private co-operation in training schemes, which would involve formulating methods to encourage high investment in training by private employers and ensuring that public bodies contract out to private companies that are willing to train employees.
We would bring together research in economic development, education, further education, European funding and the skills of the work force in Northern Ireland to create a clear and extensive training policy. We would study potential and actual inward investment in


Northern Ireland to establish a clearer picture of the forms of training that are needed to continue to secure investment.
As I have mentioned, we believe that the way to sustain economic success is through education, training, improved technology and investment. Through education and training, the Government can assist inward investors by providing the skilled and qualified work force they require. That also applies to other areas of the United Kingdom and, in particular, my area in Barnsley and south Yorkshire. We suffer from similarly high unemployment and we do not, as yet, have the skills necessary to attract inward investment to an area that has been decimated by colliery closures during the past few years. Both employers and Government have a shared responsibility to sustain an active and participatory work force, with adequate working conditions and a reasonable wage.
Productivity is increased by a well-motivated and reasonably secure work force, whereas employees who are riddled with job insecurity, fearful of the future and low in morale will lack commitment and cling cautiously to the status quo and resist change, which is the high road to efficiency. Indeed, a recent study by the Northern Ireland Association of Citizens Advice Bureaux documents a rise in employee anxiety and insecurity in Northern Ireland.
In 1994–95, the citizens advice bureaux in Northern Ireland dealt with almost 14,000 queries about employment. They found that employees were unaware of their rights and that many were not involved in trade unions. Employees claimed that employers were changing conditions suddenly and without warning. Many lived in fear of dismissal and, for that reason, felt obliged to accept deteriorating conditions of work.
In addition, workers in Northern Ireland earn less than their British counterparts—they receive 89 per cent. of the average United Kingdom wage. They have some of the lowest wages in the country, second only to certain areas of the north of England. Some 1 per cent. of employees earn less than £2 an hour, and there are still female manual workers in Northern Ireland who earn less than £1.70 an hour.
As well as providing the best possible work force, the Government have a role in securing adequate working conditions for employees. Low wage levels have been found to be counter-productive, as low earnings reduce employees' spending power, which has implications for the housing market and for the consumer confidence that is essential to building an economic recovery.

Mr. Gary Streeter: What will Labour do about low wages?

Mr. Illsley: Low wages and poor conditions can lead to higher employee turnover and more absenteeism. That has been a particular problem in the clothing industry in Northern Ireland. Employers who have constantly to recruit and retrain incur additional costs. Indeed, a report published this week draws attention to the fact that employee turnover in industry is leading many employers to employ older employees.
Labour is committed to a minimum wage and will set up a low pay commission to set a rate that will not damage employment, prices or wage structures. Perhaps that answers the point that the hon. Member for Plymouth,

Sutton (Mr. Streeter) made from a sedentary position a moment ago. I shall repeat it for him. Labour is committed to a minimum wage. We believe that people are entitled to fair wage. Paid work, at a fair wage, is the most effective way in which to tackle poverty. By that means, people will be lifted out of benefit dependency and their dignity will be restored. Pay differences between men and women will be reduced. The differences remain noticeable in Northern Ireland in every area of work. For example, a man in clerical work earns an average of £225 a week; his female counterpart earns only £199. Workers will be better motivated and, therefore, more productive. Staff turnover will be lower, thus reducing employers' recruitment and training costs. Public resources will be freed from subsidising those on low pay and be available for other purposes, such as improving health and education and creating work for the unemployed.
Labour will sign the social chapter. Northern Ireland will never be competitive on the back of a deregulated labour market with low wages and poor conditions. Those factors will not attract sustained long-term investment in Northern Ireland.

Mr. James Cran: Keep a straight face.

Mr. Illsley: I have a perfectly straight face when I say that Labour will sign the social chapter.
It is clear that someone will always do the job for less; there will always be an employer who wants to pay less. In China, there are 1 billion people who will work for a few pence an hour. The way to achieve real competitiveness is not to cut costs by cutting pay, but by doing the job better than anyone else and concentrating on quality. If that is to be achieved, business will need a well-qualified, skilled and trained work force. That is what Labour will work to provide.
The proposals that I have outlined are part of Labour's aim of abolishing youth unemployment in Northern Ireland, which still remains a problem. We know that one in four of the registered unemployed in Northern Ireland is under 25 years of age. Labour is considering specific proposals to tackle youth unemployment, including the development of an environmental task force. We are considering lifting the 16-hour rule, which prevents young people from claiming benefit—if they are studying for more than 16 hours a week to improve their skills.
My attention was recently drawn to the problems faced by young people who are trying to improve their skills by studying at local colleges, but who are being targeted by the Department for Eduction and Employment, which is threatening to withdraw benefits unless they discontinue their courses. I have sought to raise the matter with the Secretary of State.
Labour will encourage all young people to continue in mainstream education and training. There is a new deal for the under-25s, which involves employers, the voluntary sector, education and the environmental task force, all of which would combine work and help to develop talent. We are examining how our proposals will work with Northern Ireland's existing training schemes, business and industry, recognising the problems of the interface between education and training systems and the world of work.
Achieving increased competitiveness and growth through investment, innovation and skills is economically necessary and socially responsible. Growth itself,


however, does not lead to the creation of jobs at a rate that will seriously tackle Northern Ireland's acute unemployment problem, especially long-term unemployment. Although Northern Ireland's level of unemployment is at its lowest for some years, it is worrying that the number of those who suffer long-term unemployment is still quite high. As I have said, 40 per cent. of those in that position are under 25 years of age.
Long-term unemployment remains much higher in Northern Ireland than in the rest of the United Kingdom. It is also higher than the levels that prevail in the rest of Europe. About half of Northern Ireland's unemployed have been out of a job for longer than three years. The comparable figure for the rest of the United Kingdom is about a third. About 53,000 people are unemployed in Northern Ireland.
The United Kingdom opted out of the social chapter in 1992, at Maastricht. The Government claimed that the social chapter would ruin economic competitiveness and destroy jobs. It appears that that view is not backed by industry as a whole. The chair of Northern Foods, Christopher Haskins, has said that
the aspirations of the European Union's Social Chapter hold no fears for any responsible British company and the government should sign it.
Increasingly, companies such as Coats Viyella and United Biscuits are implementing the terms of the social chapter voluntarily.

The Minister of State, Northern Ireland Office (Mr. Michael Ancram): I have listened to the hon. Gentleman with great care and attention. He appears to have embarked on quoting distinguished industrialists and manufacturers. As we are debating the economy of Northern Ireland, will he quote a Northern Ireland industrialist who supports the social chapter?

Mr. Illsley: I cannot produce the quotation that the Minister desires. I am sure, however, that, as with industrialists in the rest of the United Kingdom, there will be those in Northern Ireland, business men and industrialists, who support such a view of the social chapter.
Labour believes that we have nothing to fear for work, and everything to gain for workers, in the social chapter. In the past, we have taken our lead on the improvement of conditions for working people from Europe. In 1981, we accepted the Transfer of Undertakings (Protection of Employment) Regulations. European directives gave us the following additional safeguards at work: protecting the terms and conditions of workers when businesses change hands, equal retirement ages for men and women, the extension of sex discrimination legislation to cover enterprises that employ fewer than six people, equalising the upper age limit for redundancy for men and women, and the provision of 14 weeks' statutory maternity leave for women.
Those provisions, and those in the social chapter, are not inhibitors of productivity. On the contrary, productivity is increased by a well-motivated and reasonably secure work force. Employees who are riddled with job insecurity, fear of the future and low morale will lack commitment. A lack of commitment to employment standards brings with it the risk of turning Britain into the sweatshop of Europe.
The ACE programme—Action for Community Employment—was a desperately needed project that has been extremely successful. It gives the long-term unemployed up to a year's training in projects that will benefit the community. The scheme has become a unique part of local community infrastructure. It has served to support some of the most vulnerable people in society, such as the elderly, pre-school children and the unemployed, and about 40 per cent. of participants have gone on to full-time employment or further education. That percentage compares well with what has been achieved by training and enterprise councils by means of training-for-work programmes.
Last year, in the light of ACE's success, the Government chose to reduce their funding of the project by about 25 per cent. As a result of the way in which cuts were administered, many groups faced a 40 per cent. reduction in funding and having to reduce the amount of vital work that they do.
There was an extensive response from all the groups involved in the ACE programme, as well as from hon. Members representing Northern Ireland constituencies. All opposed the 25 per cent. cut. Most were not warned or consulted. As a result of the protest, £2 million-worth of transitional help has been identified by the Government. We have not been told, however, where that money has come from. In any event, it will not go far enough when set against the ACE scheme. Many full-time employees who are funded through the scheme will still be made redundant after cuts have been implemented.
The Government claim that the cuts are the result of a rapidly changing economic situation. They say that the community work programme will take the place of lost training provisions. They know, however, that the CWP is barely up and running. Far fewer people are being trained under it than was planned. The ACE cuts are economically and socially short sighted.
I give the example of Dungannon, which takes fifth place in the list of unemployment black spots in Northern Ireland. Of the job vacancies in Northern Ireland at present, only 3 per cent. are in the Dungannon area, yet the Dungannon development association alone is losing 40 to 50 jobs as a result of cuts to the ACE programme.
The pilot scheme of community work was launched in May 1995. The aim behind it is to target the long-term unemployed and provide them with meaningful paid work. The scheme, which is targeted in Fermanagh, Strabane and west Belfast, is designed to assist 1,000 people. I understand that, as yet, only 250 of the 1,000 places have been filled.
I shall deal now with two issues that I mentioned earlier—the problems of Northern Ireland's beef industry and electricity prices. As has been well documented, electricity prices in Northern Ireland are still some 20 per cent. higher than the average in Great Britain, and that is affecting the Northern Ireland economy. It is obvious that those who are considering inward investment will look closely at electricity prices when comparing the advantages of relocation in Northern Ireland and elsewhere in the UK. Many food processing concerns that are already in Northern Ireland have profit margins of about 2 to 3 per cent., which will be affected by any large increase in electricity prices.
There have been a number of reports on Northern Ireland electricity prices. Perhaps the best known is that of the Select Committee on Northern Ireland Affairs,


which drew attention to the problems caused by privatisation. The basis of those problems is the awarding of long-term contracts to the generators that require Northern Ireland Electricity to take all the electricity produced by those generators. Some 60 per cent. of final electricity charges in Northern Ireland results from payments to the generators; the remaining 40 per cent. relates to transmission and other costs, and produces substantial profits for Northern Ireland Electricity. I urge the Government to look closely both at power purchase agreements and at NIE's profitability.
The regulator of NIE, Douglas McIldoon, has issued a consultation document in which he makes suggestions and asks for ideas about how the problem might be addressed. It is clear, however, that the only way in which to address it is to examine the power purchase agreements—the contracts with the generators, some of which will last well into the next century. The lack of regulation of those contracts, and the lack of any requirement for the generators to pass efficiency gains to the transmission companies, have caused the high electricity prices. I hope that, as a result of the regulator's consultation document, the contracts can be referred to the Monopolies and Mergers Commission, or can be renegotiated.
Agriculture is one of the largest sectors of the Northern Ireland economy, if not the largest, and within that sector the beef industry is extremely important. A quick glance at some statistics shows just how important it is. The beef export trade is worth up to £500 million a year, and about 80 per cent. of beef from Northern Ireland is exported, much of it to Europe. More than 16,000 farms in Northern Ireland rely to some extent on cattle for the beef industry, and as many as 10,000 have herds of 10 or more. There are more than 3,000 jobs in beef processing in the Province.
Despite all that, Northern Ireland has a very low incidence of bovine spongiform encephalopathy: about 1 per cent. of the incidence in the United Kingdom. The European ban on beef products, however, has had a devastating effect on the Northern Ireland economy. Because of the importance of agriculture to the economy, that effect has been far more marked in the small area of the Province than in the rest of the United Kingdom. As I have said, many Northern Ireland companies sell directly to Europe. There has also been a knock-on effect in the meat processing industry, in which jobs have been threatened. Those, too, are skilled jobs.
The Labour party believes that the controls now in place in relation to specified offals are such that the European ban on British beef should be lifted. We urge the Government to redouble their efforts in the European Council to achieve the lifting of that ban. We cannot agree, however, that Northern Ireland should be treated as an entity separate from the United Kingdom in relation to beef products.
I congratulate the Ulster Unionists on their choice of subject. It has allowed us to highlight the possibilities and opportunities that are available to Northern Ireland, particularly if the forthcoming elections and negotiations are successful.

Mr. Andrew Hunter: My response to the greater part of the thesis propounded by the hon. Member for Barnsley, Central (Mr. Illsley) is that he must

not be surprised if Conservative Members shudder with horror at the realisation that Labour economic policy would be as disastrous for the Province as it would be for the rest of the United Kingdom. The virtues that the hon. Gentleman sought to extol would have quite the opposite effect. We would witness job losses, increased costs for businesses, the stifling of economic growth through regulation and lower productivity and profitability; and, following the introduction of the social chapter—which would be wholly disadvantageous—we would discover that it was neither wanted nor needed.
Originally, Madam Deputy Speaker, I had no intention of trying to catch your eye. I believed that it would be best to leave Northern Ireland Members to speak in the debate. There is a little time to go, however, and I welcome this opportunity to make one or two selective observations. I believe that any accurate overview of the general state of the Northern Ireland economy must, on the whole, present an encouraging and satisfactory picture. The essential issue—the essential good news—is measured in the simple statistic that the Province enjoys greater economic growth than the rest of the United Kingdom. Growth last year amounted to some 3.5 per cent., compared with only 2.6 per cent. on the mainland.
I note, however, that the report that forms the basis of today's debate includes a word of caution. The Northern Ireland Economic Council recognises that there is less slack in the local economy than in the national economy, and warns that a significant relaxation of fiscal or monetary policy could have undesirable effects. It postulates that firms might simply come up against shortages—especially in the short term—which could feed through into inflation. Obviously, that would not be in the interests of Northern Ireland. I wonder whether the Government accept the council's thesis, and whether they acknowledge that a significant relaxation of fiscal or monetary policy could have adverse impacts. If so, I hope that that potential danger will remain firmly in their sights.
A number of hon. Members have referred to the relevance, and the supreme importance, of a permanent ceasefire to economic prospects in Northern Ireland. That is self-evident, and I shall add little to what has already been said. It is obvious that Northern Ireland's economy would receive an immediate and permanent boost if there were a permanent ceasefire—a point that Sir George Quigley makes in his report:
The economy was beginning to reap significant benefits from the prospect of a permanent and durable peace and it is important for future economic growth that no effort is spared in the search for a solution which will consolidate and enhance the gains of the past seventeen months".
Sir George was writing in February, shortly before the resumption of violence. It is equally clear that inward investment and business confidence were dealt a severe blow by that resumption of violence.
There was a more direct implication. The paramilitary ceasefires had enabled the Government to plan for a reduction of nearly £300 million in expenditure on law and order in the years leading up to 1999. Given the uncertainty of the security position, that poses questions about the organising of priorities.
Employment was the subject of the first inquiry and report of the Select Committee on Northern Ireland Affairs. During their deliberations, its members became


aware of the complexity and depth of the problems and that there are no simple, short-term solutions. During the Committee's work, I postulated a heresy: the argument that there might be mileage in considering turning the Northern Ireland economy into a tax haven to promote greater economic growth than in the rest of the United Kingdom. My arguments were not accepted. It was suggested that they were too inherently inflationary, but there is a point to make that lightening, wherever possible, the burden of direct and indirect taxation on businesses in the Province should be an objective.
The unemployment statistics are encouraging. As we have heard, unemployment in Northern Ireland is at its lowest level since May 1981 and has fallen in nine of the past 12 months. It is pleasing to note that short-term unemployment in Northern Ireland is rapidly approaching the national average. There is less reason for satisfaction with regard to long-term unemployment, which is clearly a significant problem and, I fear, will continue to exist, it seems, for some time. It must remain firmly in the Government's sight that long-term unemployment problems should receive all possible attention.
The Government rightly draw attention to the fact that, since September 1994, there have been 17 new cases of inward investment. Those are worth some £360 million and have the potential to create, over a short period, some 5,000 new jobs. I wonder, however, whether the various projects that are being established can be attributed to the investment conference in Belfast, which was held, if I recall correctly, in February last year—perhaps it was at the end of the previous year—and to the similar conference in the United States of America in March last year. Are those initiatives resulting in a return on investment and in an increase in inward investment in Northern Ireland?
I note with interest the favourable increase in exports from the Province—some 25 per cent. from 1991 to 1994. That, one presumes, is an accurate reflection of, among other things, Northern Ireland businesses' increasing competitiveness. Do the Government have a view on the sustainability of that level of increase? If it can be sustained, it is encouraging news.
On another more general point—the concept of targeting social needs—the Government have rightly made a priority of seeking to tackle disadvantage and of promoting equality of opportunity and treatment for everyone in Northern Ireland. The social needs programme is targeting resources on regions and individuals who are deemed to be in most need. I hope that it will result in a reduction in social and economic differences.
When he replies to the debate, will my right hon. Friend the Minister find an opportunity to make an assessment of the effectiveness of the three major schemes of which I am aware: Making Belfast Work, the Londonderry initiative and the rural development programme? Does he believe that sufficient and acceptable progress is being made in those initiatives?
With regard to the report, I shall be ultra-selective and, if I may, focus attention on paragraphs 2.19 to 2.24 on pages 15 to 18, which deal with public expenditure. Paragraph 2.19 caught my attention in particular. It states:
The control of public spending is crucial to the Government's ability to meet public finance objectives and allow room for tax reductions.

I received that favourably. It continues:
From Northern Ireland's viewpoint the Chancellor's decision on the future path of public spending is crucial. This reflects the fact that public expenditure is much more important for Northern Ireland than the UK".
The remainder of the paragraph, however, contains an alarming statement. We are reminded:
In public spending matters, however, the reality of expenditure outturns can sometimes differ from the rhetoric. For example, the planned 1.3 per cent real cut for the Control Total…spending in 1994–95 turned into a 1.4 per cent rise in real spending.
It is alarming and disturbing that what was intended to be a real terms reduction in public expenditure should result in a real terms increase. Has that point caught in particular the attention of my right hon. Friend the Minister? What measures does he believe can be taken to ensure that, in future, expenditure is more in line with Government planning?
Paragraph 2.20 on page 16 illustrates a dilemma facing the Government. It states:
The Secretary of State for Northern Ireland has identified three public expenditure priorities—'defeating terrorism, strengthening the NI economy and targeting social need'".
The paragraph continues:
Since the ceasefires in late 1994 these priorities have been reordered".
Strengthening the Northern Ireland economy became the first priority, targeting social need the second and providing
whatever level of resources is necessary for the preservation of law and order in Northern Ireland
became the third. With the current uncertainty, where do we stand now in relation to Government priorities? With violence resumed on the mainland, what priorities can the Government select when the level of resources that may need to be devoted to security matters is unknown? Clearly, such circumstances make tight Government planning of economic matters difficult.
Paragraph 2.21 refers to the so-called peace dividend and contains the attractive and appealing speculation that the value of the annual dividend
under conditions of peace and political stability varied between a maximum estimate of £601m and 12,277 positions to a minimum of £427m and 8,168 positions".
Presumably, such reasoning must now be put into abeyance. At present, we simply cannot speak or plan in terms of an effective peace dividend.
The following paragraph makes the vital and central point on the need to deliver public services in an efficient and effective manner:
the reallocation of these funds should not deflect attention from the need to deliver public services in an efficient and effective manner.
It continues by focusing attention on the Department of Health and Social Services draft regional plan. Will my right hon. Friend give reassurances that the Government bear in mind the need for public funds to be spent in the most and efficient and effective manner possible, not least in the vital sector of health and social services spending?
My last substantive, point on paragraph 2.24, is that we are again faced with the dilemma of setting public expenditure priorities in the present uncertainty about security. Perhaps in his reply the Minister will address that issue because the fundamental problem facing the Government is that when they do not know what


resources need to be allocated to security matters, it is difficult for them to plan public expenditure. Any overview of the Province's economy is favourable and encouraging, and it is good that economic recovery and growth are advancing. The report shows that we can have confidence in the Government's handling of the situation.

Dr. Norman A. Godman: I compliment the members of the Ulster Unionist party for choosing this subject for debate. I say to the hon. Member for Basingstoke (Mr. Hunter) that I would be happy to argue the case for the social chapter and a minimum wage and for a Scottish Parliament and a tartan tax. However, that would take me outwith the framework of the debate. In my brief speech I wish to put several questions to the Minister about the Northern Ireland fishing industry, the Action for Community Employment—or ACE—programme, the community work programme and sea ferry and air services between Northern Ireland and Scotland.
The Northern Ireland fishing industry employs more than 2,000 people and is important to small fishing communities, as is the case in and around the Firth of Clyde. In 1994, fish landings were worth £18 million. My questions are prompted by paragraph 5.42 on page 64 of the document called "Northern Ireland Expenditure Plans and Priorities". The paragraph refers to the European Union's multi-action guidance programme, which states that by the end of this year the United Kingdom's fishing fleet will have to be reduced by about 19 per cent. The paragraph states:
A decommissioning scheme was introduced in 1993–94 and in 1995–96 a further 13 Northern Ireland applications were successful under the scheme at a cost of £1.5 million. This brings the total of successful applications in Northern Ireland to 55 at a total cost of £4.5 million and equates to a 20 per cent. reduction in the gross registered tonnage of the Northern Ireland fleet. The position is monitored so that action can be taken if effort by the remaining vessels should increase.
As the son of a fisherman and a fishergirl or, as she would have been known in those days a fish house lass, throughout my adult life I have argued that there are too many fishermen pursuing too few fish around our coasts. The document seems to show that the Northern Ireland fishing fleet has met the obligation that was placed upon the United Kingdom by the European Union to reduce the gross registered tonnage, because it has reduced its fleet by 20 per cent. and the requirement is 19 per cent. Will the Government assist with modernising that reduced fleet?
In Northern Ireland, as in the west of Scotland from Ullapool to Girvan and beyond, there is an aging fleet. That does not make sense for the safety of fishermen or for making life less difficult for the men who pursue the most hazardous occupation in the United Kingdom. How many vessels have been ordered by the owners of vessels in Northern Ireland? How many conversions to increase engine capacity have been encouraged by the Northern Ireland Office for EU funding? Does the Northern Ireland fleet, like those of the Western Isles and the Clyde Fishermen's Association, suffer because up to now the United Kingdom has failed to meet the requirements of the multi-action guidance programme?
Does the Minister agree that there should be grants to replace aging vessels that may become less and less efficient and perhaps more and more hazardous in heavy

weather? I readily acknowledge that fishing power must be constrained by the need to maintain healthy stocks. If any fishermen are to be banned, they should be the Spanish. I hope that the Minister will forgive my ethnocentricity. [Interruption.] A common fisheries policy should be based upon regional preferences and management because in fragile fishing communities there are few options for other forms of employment. That holds just as strongly for Northern Ireland and, indeed, for some of the smaller fishing communities south of the border, as it does for Scotland.
Bearing in mind the need to constrain fishing effort to the total allowable catches and the need to maintain viable stocks, a reduced fleet must be modern. I should welcome the Minister's response to the concerns that I have expressed—dare I say it—on behalf of the fishermen of Northern Ireland and Scotland. Fishing is important because, as I have said, more than 2,000 people in Northern Ireland are directly employed in it. Table 5.19 of the Government's report is entitled "Fisheries sector performance indicators". What is the employment ratio for the catching sector of the Northern Ireland fishing industry?
I shall now deal with ACE and the community work programme. The last time that I was in Northern Ireland, some representatives of voluntary organisations, one of whom was Quintin Oliver, who I think is the chief executive of the Northern Ireland Council for Voluntary Action, expressed concern about the decision savagely to reduce the ACE programme. My hon. Friend the Member for Barnsley, Central (Mr. Illsley) said that the reduction was about 25 per cent. Representatives from community and voluntary organisations expressed deep anger and serious concern about this ill-judged decision.
In paragraph 5.16 of the Northern Ireland Economic Council's report, the authors state:
Within the overall Industry, Trade and Employment (ITE) programme an important announcement was the decision by the Training and Employment Agency (T&EA) to cut the Action for Community Employment (ACE) budget by 25 per cent., thereby reducing the number of placements by 1,800.
The authors go on to state that the programme
was attractive for those receiving no or relatively low benefit and has attracted high levels of part-time jobs".
The hon. Member for Basingstoke said that he was highly selective in his remarks about such documents. I should point out that this document goes on to state:
It is, of course, precisely in this area where much new job growth has taken place.
However, the authors then comment:
As yet, with the Community Work Programme not fully operational there do not appear to be any alternatives in place to accommodate 'discouraged workers' most affected by the scheme.
I should like to ask the Minister what will happen to the community work programme—which, two months ago, a ministerial colleague of his suggested would, by and large, take the place of much of the ACE programme.
Paragraph 6.159 of "Northern Ireland Expenditure Plans and Priorities" states that the community work programme
was introduced in April 1995 on a two year pilot basis and will provide up to 1,000 places. Its aim is to assist local communities to break the cycle of long-term unemployment in their areas by assessing and developing the skills of long-term unemployed adults as a resource to effect local improvements.


The three areas of Fermanagh, Strabane and west Belfast are then mentioned.
What is to happen to that community work programme? Has the Northern Ireland Office now had a chance to assess the implications of the 25 per cent. cut in the ACE programme? Will that lead to job losses? Will those job losses be more than recompensed by the jobs created by the community work programme? Those are important questions for people living in badly deprived areas in many communities in Northern Ireland. Those people—particularly those associated with voluntary community organisations—have a right to know the answers to those questions.
At the weekend there was mention in the Scottish press of a ferry service between Northern Ireland and Scotland. Some have argued that such a service between Ballycastle and Campbeltown could do much to revive the economy of the Mull of Kintyre, which has recently suffered severely from job losses. If such a service were to link Ballycastle, Campbeltown and, for example, Wemyss bay, rather than Greenock, and if it were to be extended to Moville in county Donegal, would that allow those concerned to obtain more easily funding from the European Union, as it would involve ferry links between two countries, as well as Northern Ireland and Scotland in the United Kingdom?
The best case might be for the creation by Caledonian MacBrayne, for example, of a service between Ballycastle and Campeltown in the first instance, and we could then see how that service develops, particularly in the tourist season.
I should like, finally, to ask a question about air services between Northern Ireland and Scotland, as it has been brought to my attention that there has been a reduction in such services. I find that the service between Glasgow airport—that superb airport, which is just a few minutes from my constituency—and Belfast, for example, is very useful. I should be most pleased if the Minister were able to refute the complaint that those services have been reduced. It would be a shame if such a reduction has taken place because of its effect on the development of air services and sea ferries.
If the Minister cannot answer all my questions in his reply—especially those on the multi-action guidance programme—I shall be happy to await a letter from him.

Mr. Harry Barnes: It is a pleasure to follow my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman), who takes a serious interest in Northern Ireland affairs. Like me, he is an associate member of the British-Irish interparliamentary body—a body that we wish Ulster Unionists would pay attention to because it is able to discuss such matters as the economic development of the island of Ireland, and the very important role played by the Northern Ireland economy.
I cannot follow my hon. Friend the Member for Greenock and Port Glasgow on subjects related to fishing or to ferry services, partly because the constituency that I represent is entirely land-locked, and I tend not to have any knowledge on those topics.
I was interested in the points that my hon. Friend the Member for Greenock and Port Glasgow raised about the cuts in the Action for Community Employment programme in Northern Ireland. In fact, the sections of the report that he quoted to us were the ones that I had marked in the report. I therefore do not need to develop those points, except to say that paragraph 5.16 goes on to state:
The withdrawal of ACE is likely to cause funding difficulties for a number of voluntary and community organisations.
There is a plethora of voluntary and community organisations in Northern Ireland. The possibility of voluntary organisations being established in Northern Ireland is considerably aided because politics in Northern Ireland have their own peculiarities and because political parties there are not part of government. Many of those organisations operate on a cross-community basis, and little could be more important than developing that type of work and building such links and connections. Therefore, cuts in the ACE programme that affect those programmes is a very serious matter, and would be additional to equivalent action taken in Britain.

Mr. William Ross: Does the hon. Gentleman care to consider my thesis that one of the reasons why there are so many of those bodies is the powerlessness of local government? There are so many things that local government could and should be doing, but which it is not doing.

Mr. Barnes: It is certainly an encouragement to voluntary organisations when local government is not active or achieving what it should be achieving, or when it is prevented from operating in the manner it is in Northern Ireland. I am a great advocate of establishing the equivalent of parish councils in urban areas—what are called neighbourhood councils. I think that such councils should act as pressure groups on behalf of their communities. Like voluntary organisations, they should get together and enact plans in their areas to pressurise those with administrative responsibility in wider local government, in the Province and in Westminster.
I thought that the speech of my hon. Friend the Member for Barnsley, Central (Mr. Illsley) was excellent. Anyone from Northern Ireland who listens to his contribution—as they will do—will be very impressed with the relevance of Labour's policies to Northern Ireland in such matters as training, education, jobs, provision for small business, the minimum wage, the social chapter, electricity prices in Northern Ireland, beef, specific provisions on Northern Ireland and Labour's promise on the Northern Ireland skills audit. All these are of tremendous relevance to the people of Northern Ireland.
The great pity is that, however much attention is paid in Northern Ireland to my Front-Bench colleague's views, Labour does not run candidates in Northern Ireland so the people of Northern Ireland cannot take up his valuable ideas. Labour organisation in Northern Ireland, tying in with our policies, needs to be taken on board to make those views a reality. Unless other political parties in Northern Ireland are willing to pick up some of our ideas, offer them to the electorate and do so in a way that cuts across community divisions, Labour is in a very good position to do it. I am afraid that that is a bit of a back-handed compliment to my hon. Friend the Member for Barnsley, Central but it is sincere.
It is great that we are debating the Northern Ireland economy, which is important not only in general terms but in developing the peace process. An improved economy and growing prosperity are good in themselves but can also be very important in tackling the problems of violence and intimidation.
Michael Barratt-Brown wrote an excellent pamphlet on the tragedy in Yugoslavia. It points out that some of the major problems that caused its conflict arose because economic factors divided the people. On a smaller scale, Northern Ireland has been behind Britain in terms of economics—for example, it has had higher unemployment rates. This has meant that it has been possible for extremists to develop sectarian policies and get paramilitary support—they find it easier to do so in adverse economic circumstances. We should all be very aware of the links between economics, divisions and violence.
There is a problem in talking about growth in Northern Ireland. There is a sense in which growth and improved prosperity undermine violence, but an agreement to end violence would allow economic growth to develop. Economic growth and the end of violence are not in separate compartments. We cannot say that the start of one will lead to the other—they are interlinked.
We have opportunities to debate Northern Ireland economic matters but we sometimes fail to make full use of them. Twice a year we have appropriation debates. I have always said that they are the nearest thing to Budget debates for Northern Ireland. We should take care to develop them into serious discussions such as that which we are having today. It is often the case—again, this might be natural given the position of local government in Northern Ireland—that Northern Ireland Members attend appropriation debates and use them as opportunities to stress constituency problems and their case loads because no other avenues are available to them. Sometimes, however, it would be good to change that and have a debate like today's so that we can determine the different political stances.
I congratulate the Ulster Unionist party on providing this opportunity to discuss the Northern Ireland Economic Council's report and on producing its own document entitled "Economic Prosperity for All". It is dated May 1996 so I presume that it is linked with this debate. I am not saying that I go along with all the ideas expressed in it, but it is important that the party has produced it. I would encourage other political parties in Northern Ireland to develop their own approaches and strategies.
The leader of the Social and Democratic Labour party said that there were common interests between his party and what the right hon. Member for Lagan Valley (Sir J. Molyneaux) said, but if we look back to the previous election, it is clear that there were some differences in the two parties' manifestos. In a sense, the SDLP manifesto contains economic values that I would warm to more readily than I could warm to the contents of the other manifestos. It said things such as:
We believe that efficient and effective public services are essential to our well-being and development as a community",
and that it is concerned that
moves from direct to indirect taxation are at the expense of those on lower incomes".
It states that a shift to a more general indirect taxation
should not proceed unless accompanied by relevant compensation measures for people in lower income groups".

It also mentions reform of the common agricultural policy and the refocusing of investment strategies and appeals for inward investment. That is also part of the UUP's position, although it is given a different flavour.
Given the indications of agreement from the leader of the SDLP, I wonder whether what we had in 1992 was a traditional Social Democratic and Labour party agenda and that what is now developing is new Social Democratic and Labour party provisions which, as long as they are in line with what was said by members of our Front Bench, might be entirely acceptable but might not have developed as clearly in some areas as they had in the past.
One problem with the economic structure of Northern Ireland within the United Kingdom is that Northern Ireland has only about 3 per cent. of the UK population and is therefore not seen as being a major influence in determining policy. The Northern Ireland Office often seems to run up against the general stance adopted by the Conservative party and is sometimes obliged to pick up some nonsense such as the privatisation of electricity, the hands-off state and agency provisions, which operate elsewhere. It is felt that such agendas can be plonked on Northern Ireland, but the Government should pay attention to the economic and social circumstances of Northern Ireland. Even if the Government do not believe that policies of a more collective nature are appropriate for Britain, they should consider their relevance to Northern Ireland.
As the council's report shows, dependence on benefits is considerably greater in Northern Ireland than in Britain, so cuts in benefits have a disproportionately greater effect in Northern Ireland unless they are made good by improved job opportunities. In addition, because of the poverty trap, disincentives to take work will be even greater in Northern Ireland than in Britain. The minimum wage, which was stressed by my hon. Friend the Member for Barnsley, Central, is therefore of great relevance to Northern Ireland. Employment opportunities would lead not to the same degree of poverty trap provision, but would allow improved earnings to enter the family budget.
It has been pointed out that Northern Ireland's housing market has experienced some buoyancy. Growth in the Northern Ireland economy might therefore be hindered in ways that it is not elsewhere. Economic growth and development, especially the sort in which I believe, has often been associated with house building. The emergence from the problems of the 1930s, at the end of the depression before the war started, was very much associated with council house building. All sorts of benefits accrue as a result of house building because people in new houses want new furniture, new curtains and new wallpaper, which gives a Keynesian-type boost to the economy. There might be less scope for that to occur in Northern Ireland due to the slightly more buoyant housing market of recent years and some of the roles played by the Housing Executive, although the Government have been trying to interfere with it.
Economic performance was relatively good in Northern Ireland in 1995. As in housing, that means that there is less slack to pull in. The Government should consider that seriously when they work out which policies they feel are relevant to Northern Ireland. We should examine reports of the Select Committee on Northern Ireland Affairs and consider the work of the British-Irish interparliamentary body, which often discusses economic relationships in the European Union.
Such matters are the stuff of politics. Hon. Members rush into the Chamber to discuss Northern Ireland concerns about bombs, the constitution and high politics, but, as is obvious from today's debate, they do not do that for the bread-and-butter concerns of the people of Northern Ireland. Yet the Northern Ireland people want us to address exactly those matters. Indeed, in doing so, we sometimes discover different combinations of alliances. Perhaps we should have more solid argument and some good ding-dongs in the House about Northern Ireland's economic direction among all its politicians rather than ding-dongs about constitutional developments and community divisions. That is the direction that the House needs to take.
The Northern Ireland Economic Council's report contains much of considerable interest. It certainly does not just peddle Government prejudices for certain policies. It was unfortunate that the hon. Member for Basingstoke (Mr. Hunter), who has now left the Chamber, suggested that there should be cut after cut to facilitate income tax reductions. That might be a big debate affecting British politics, but in Northern Ireland, it could have a serious effect on the possibilities of achieving improvement and growth.
The report makes a number of suggestions on page 68. It calls for greater partnership between the public and private sectors, which is certainly the language of new Labour, and should therefore be carefully considered. It also says that there is
the need to ensure that economic opportunities provided by the paramilitary ceasefires are built upon".
At the moment, the ending of the paramilitary ceasefires is directed more towards London than Northern Ireland. In the near future, there might be a restoration of a ceasefire and opportunities might begin to flow from it. I hope that when that occurs, we do not consider it a great chance to take various financial resources away from Northern Ireland. Such a ceasefire should be an opportunity to encourage developments in Northern Ireland and take action on an economic and social front that will take the ground away from the paramilitaries. I have always been insistent that we should do that.
I greatly support the bipartisan policy in Northern Ireland which allows debates such as these. But I differed from the line taken by my hon. Friend the Member for Barnsley, Central, the Front-Bench spokesman, on the prevention of terrorism Act because I thought that precisely such a line could give ground to the paramilitaries that they could use and argue to recruit people. We need to stop the recruitment of paramilitaries, and nothing would stop it more effectively than people having more money in their pockets, being able to travel, mix with people, build a life for the future and have security. We should be working together to establish the exact formula by which such economic change can be achieved, regardless of how difficult ding-dong debates on economic ideas may be.

Mr. William Ross: A number of hon. Members have begun their speeches by expressing thanks to members of the Ulster Unionist party for tabling the motion on this half Supply day that falls to us

each year. I express my thanks to the hon. Member for Greenock and Port Glasgow (Dr. Godman) for covering the fishing industry. It certainly saves me any trouble in that direction. He referred to some very important issues to which I hope we shall return before we are very much older. The industry is of concern to many people in Northern Ireland as well as far further afield. The number of fish in the sea, what harvests we can reap, and the number of people who can make a living from the industry are problems that will not be easily resolved or simply go away.
I express my thanks to the hon. Member for Foyle (Mr. Hume), who has left the Chamber, for raising the ceasefire, or the possible re-ceasefire of the IRA. I must confess that anyone who watched Jonathan Dimbleby interview one of Sinn Fein-IRA's leading members yesterday will not have been terribly encouraged by the responses that Mr. Dimbleby received. One of my friends said that they wished that the pair were put on again, which was an interesting departure from the point of view one normally hears whenever such spokesmen appear on our screens.
I say to those who will be speaking to the hon. Member for Foyle that I hope that he and the IRA-Sinn Fein understand that the sort of ceasefire that we had is not good enough to attract anyone. It must go far beyond that; there must be a real ceasefire and a real cessation of violence against those who oppose the gunman in any shape or form. We have seen what has happened over the past 20 months or more and it is just not acceptable that such behaviour continued—even after a ceasefire was announced. It must be for real.
I should like to turn to the Northern Ireland meat industry, which is of course bound up in the destiny of the United Kingdom beef industry at the moment. As has already been pointed out, the situation is comparatively more serious in Northern Ireland than elsewhere in the United Kingdom because Northern Ireland exports a much greater proportion of its beef production than England or Wales. I shall leave Scotland out of this discussion for the moment—it also exports a large amount of beef and it has its own peculiar problems.
I shall illustrate the importance of the beef industry to Northern Ireland by pointing out that the United Kingdom exported some 246,000 tonnes of beef in 1994. It is difficult to quantify the number of cattle that were exported because some of it was on the bone and some was boned beef. Of that 246,000 tonnes, 57,400 tonnes came from Northern Ireland alone—that is approximately 28 per cent. of the United Kingdom's beef exports. That puts the importance of Northern Ireland's beef industry into perspective. When one combines Scotland's beef exports with Northern Ireland's beef exports, one sees that about half the exports come from those two areas of the United Kingdom.
A few days after the beef export ban was imposed, I attended a meeting of farmers at the Balmoral centre in Belfast. A spokesman for the transport organisations informed the meeting that 104 specialised lorries have nothing to do. That is a critical situation: the lorries are important economic assets that are doing nothing and that is costing a lot of money. Jobs will be lost if the lorries sit idle. This is only one tiny facet of the problems of the beef industry with which the Government have to grapple.
The lack of confidence in that sector was exposed by a report of the PA Consulting Group dated 7 May. The report pointed out that investment in the beef industry has reduced by exactly 100 per cent. compared with one year ago. In other words, people have decided not to invest in the beef industry in Northern Ireland. This is a serious situation and there are all sorts of nuances. We shall have ample opportunity to discuss and explore this entire issue in Committee this week and on the Floor of the House.
I recognise that the whole of the United Kingdom's beef industry sinks or swims together, but I contend that with the traceability capacity that we have in Northern Ireland, with the quality assurance that we have in Northern Ireland and with the improving situation in Scotland and elsewhere in the United Kingdom regarding traceability, we can guarantee the beef. We should supply this beef and use it as a crowbar to reopen the overseas market and to break the ban. We could begin this process with the Northern Ireland product.
I understand all the arguments about treating everyone the same, but the situation is not the same everywhere. We could use this key to unlock the door to Europe once more.
There is a problem in relation to bull beef and what we will do about it. We cannot open the door and put those animals out to grass—and everyone knows that. That is part and parcel of the economic difficulty facing the whole farming industry. It is like a row of dominoes—when one is pushed, they all fall. The key is the European market; the key is opening up the world market for our beef. We need to get our population-20 million to 30 million people—to have their Sunday roast again, which would be a great help.
The report of the PA Consulting Group showed that, compared with a year ago, orders are down, output is expected to rise slightly over the next 12 months and investment overall is up by 13 per cent. Given that there was no investment in meat processing, other sectors in Northern Ireland have had an increased level of investment, which is to be welcomed. The figures should be viewed in a positive light in the medium to long term so far as the Northern Ireland economy is concerned. However, there are some worries in the manufacturing sector.
I am sure that over the weekend hon. Members listened, with a fair degree of jealousy, to the possibility of a large investment going to south Wales—we all hoped that it would come to our areas. The hon. Member for Greenock and Port Glasgow is smiling—no doubt he would have been happy to have had that investment in Port Glasgow. Any part of the United Kingdom would be happy to have that sort of investment. We welcome the fact that investment is coming into the United Kingdom, and we hope that similar investments will be made in the future.
We hope that when investors come here they will be encouraged to increase their uptake of local graduates and that they will to do more research and development in the United Kingdom, particularly in Northern Ireland. My hon. Friend the Member for Belfast, North (Mr. Walker) agreed with me when I pointed out that electronics firms are employing a large number of graduates—and we want to see more of that. We want our young people to stay at home, and we want to see research and development structures at home. That is how we will get more home-grown firms. They will provide a lot of employment

in the future and we need to grab a piece of the action. We have to get our best trained young people to work at home, rather than export them to America and elsewhere.
I refer to factories in my constituency—Benelux, which appears to be experiencing some job losses; and AVX in Coleraine which laid off 78 people last weekend. In relation to AVX, I hope that there will be further reinvestment, that there will be retooling, that it will get back its market share, and that the jobs will be restored. These are areas of high unemployment and we need to keep all the jobs that currently exist.
Interesting figures are starting to emerge about the general unemployment rate in Northern Ireland, in that there is a big difference between the level of male and female unemployment. The female unemployment rate is currently 6 per cent. or less and the male unemployment rate is three times that figure. This is worrying. We would like the male unemployment rate to drop. One firm that is engaged in textiles had to put its factory in Newry rather than Strabane because it could not get workers in Strabane—which has more than 30 per cent. unemployment, so there is something wrong somewhere. Perhaps it is the wrong sort of work; perhaps there are not enough people unemployed as opposed to the high percentage. It is worrying that factories are saying that they cannot get enough workers in areas of high unemployment. There were 800 jobs involved in that case.
If the Government have not done research as to why this is so, it is long overdue. We need to find out why female unemployment is down to a reasonable level when compared with the rest of the United Kingdom—and could become lower with a bit of hard work—and why male unemployment is at an atrociously high level. I hope that the Minister will carefully consider the reasons for that and target the problem of male unemployment, as opposed to that of female unemployment, which is largely resolved.
The Minister will recall that Baroness Denton visited the Coleraine area on Friday 3 May. I accompanied her on visits that I had arranged to three manufacturing firms.
The first firm was a very small, high-precision engineering concern, operating from a farmyard. The second manufactured heavy truck bodies, fitted them into trucks and exported them. Interestingly, we had some Danish visitors with us, and when we went into that works the first truck body that they saw was labelled "Denmark", so the exports had got that far. The Danish visitors were even more pleased to discover that the brochures were printed in their own language—a detail that so many people never seem to think about. The third firm was a very small organisation in one of our enterprise parks in Coleraine, which manufactured a range of medical equipment, now being exported far and wide.
The interesting thing about all those small, healthy organisations was that each was home grown. All were started by local people. One of those people had started the business more than 60 years ago and built up a fairly large organisation by Northern Ireland standards. The other two firms are much more recent, and tiny, and do high-quality work very well.
What more do the Government propose to do to encourage such enterprises? They are home grown. These folks will not uproot and leave at the first chill wind of economic change. There may be a fluctuation in the number of employees if things get really difficult, but they


will remain there and will not go away. Those small firms need more encouragement, and more overseas investment, because many of them operate by supplying larger organisations, some of which are created by overseas investment and some of which are home grown.
What positive results have emerged from the visit of our American friends to Belfast and the visit of so many people from Northern Ireland to Washington? It was a great jamboree. We all enjoyed it, but we did not go for the beer; we went for jobs. I should like to think that some good investment had begun to appear as a result. I have not been told of very much yet. It is time that we saw some results.
As has been said, inward investment will not be encouraged by energy prices in Northern Ireland. You will recall, Mr. Deputy Speaker, that Ulster Unionist Members were not at all happy about the way in which Northern Ireland Electricity was privatised. It was sold off with long-term high profits built into the scheme. There is little hope of an early review of that long-term payment system, which will force prices up and up.
The fuel used for generation—oil and so on—is cheaper than it was at the start of the privatisation period, yet the people of Northern Ireland find the cost of electricity still increasing. They are not happy, we are not happy, and the large industrial users, who find that about 80 per cent. of the final cost of electricity consumed is taken up by generation, are very unhappy, to put it mildly.
Those generation costs will increase considerably as a result of the long-term agreements entered into when Northern Ireland Electricity was privatised. I wonder whether the Government support package of about £60 million will solve the problem. Perhaps we should seek a way to revamp those agreements, for conditions have changed so much in even the short time since our electricity was privatised. Whatever money there is must be used to control generating costs. Will the Government give a commitment in that regard?
Several other measures could and should be considered in that regard. We still have the problem of the cost of heavy oil and the VAT charged on it. We still have the problem of the gas pipeline, which is tied to British Gas purchasing the Ballylumford station. I understand that the price of that gas is likely to be roughly double the current price of gas in Great Britain. We also want to know how much of that gas will go for domestic consumption and for consumption by industry other than electricity generation.
The subject is all the more topical because we all woke up this morning to hear on the radio that the gas industry over here was being lambasted right, left and centre for unconscionably high profits, and that massive reductions—I believe up to 20 per cent.—are demanded.
If the gas price charged to people in Great Britain steadily decreases, will the gas price charged to people in Northern Ireland remain at its existing unrealistically, scandalously high level for the generation of electricity? If so, British Gas would add to its profits, not only from the gas, but from the electricity that it produces and sells from that gas. That would not be tenable.
I understand that British Gas is involved in explorations for gas in the Irish sea. If it finds gas there, what will be the price regime in relation to that, and what will the

Government do about it? If the cost of electricity and gas for all industrial, commercial and household purposes in Northern Ireland is twice that in Great Britain, not many users of energy or gas will build factories in Northern Ireland. Right hon. and hon. Members who represent constituencies in south and west Scotland may be happy about that, because if those people want to remain close to the island of Ireland, that is where they will build a factory.
We must do something on a large scale and for the longer term about energy generation in Northern Ireland. That must be reflected, not only in this first contract period for gas and electricity prices, but in all succeeding contracts in succeeding years.
The Conservative party is always willing to push competition, and I am all in favour of competition, but we must get away from the present position. We seem to have replaced a public monopoly in energy with private ownership that is concentrated in so few hands that there is no real competition. We still have a managed market, in that the only person who is able to put pressure on companies to force down prices, to make them appear more realistic, is the regulator.
We must go beyond that. We must open up the market if we are to receive the benefits that we expect to flow from privatisation—greater efficiency and lower prices. That includes, in the medium term, moves toward generation in Northern Ireland from our native lignite sources. I know that there are all sorts of connected problems, but the lignite is there—a home-grown source of electricity—and we should push on with it, not hang back.
If we are building a conductor across the north channel to import electricity, we can use it to export electricity. We should be in the happy position where we could import and export electricity from and to the British and the European grid, and eventually from and to the Irish Republic. That should bring down the cost of the spinning reserve in electricity—I put the same arguments in the early 1970s—and, in turn, reduce electricity overheads. If those points had been considered when Northern Ireland Electricity was being sold off, we would not be in such a mess today. I hope that the Government will address them now.
Reference was made to transportation to and from Northern Ireland—the hon. Member for Greenock and Port Glasgow has always been very supportive of Northern Ireland in that regard. I hope not only that there will be an extra link to Campbeltown from Ballycastle but that something will be done about the roads in Scotland. Northern Ireland's economic problems do not begin and end at Larne—some extend far beyond that. I urge the Minister to speak to his right hon. Friend in the Scottish Office about improving those roads. Another problem is the fact that grant aid to ports differs according to whether they are in private or public ownership. I hope that the Minister recognises that anomaly and will ensure that the grants are equalised so that all ports are on a level playing field.
Hon. Members referred briefly to the tourist industry. As the hon. Member for South Down (Mr. McGrady) pointed out, much of the investment has been in luxury hotels and we face real difficulties with the provision of other accommodation. One constituent who lives on the north coast told me that in one afternoon last year she received 70 calls from people seeking accommodation.


However, she had accepted the first caller and her accommodation was full. Heaven only knows where the other people stayed—I suspect that many did not stay in Northern Ireland as accommodation is scarce. We have reached a situation where Northern Ireland has nearly as many tourists as residents. We need a lot of accommodation—particularly medium-quality accommodation which ordinary men and women can afford—and a high-speed link to Scotland and elsewhere.
The speeches of my right hon. Friend the Member for Lagan Valley (Sir J. Molyneaux) and of the hon. Member for Foyle, the leader of the SDLP, underlined yet again the fact that the people of Northern Ireland can work together for the common economic good. I hope that that belief will be reflected in political and constitutional measures before too many weeks have passed.

The Minister of State, Northern Ireland Office (Mr. Michael Ancram): This has been a very useful debate, which was launched in an admirable manner by the right hon. Member for Lagan Valley (Sir J. Molyneaux). As the hon. Member for North-East Derbyshire (Mr. Barnes) pointed out, it is interesting that hon. Members talked, by and large, about the economy and did not drift into an appropriation order debate—although the hon. Member for East Londonderry (Mr. Ross) echoed a debate of that sort as he listed the points that he would like answered. Nevertheless, we have had a constructive debate to which I hope to respond positively.
The hon. Member for North-East Derbyshire—who unfortunately has had to leave the Chamber—gave his Front Bench a little grief about whether Labour should organise itself in Northern Ireland. I do not wish to interfere in that argument. However, he surprised me by suddenly heaping praise upon the hon. Member for Barnsley, Central (Mr. Illsley), whose speech took the rest of us by surprise. I think that he was trying to enunciate Labour's new policy for Northern Ireland and, in fairness to him, I shall study his remarks carefully.
The hon. Gentleman referred to issues such as training and education and the like, but he did not offer anything tangible. That may have been a deliberate strategy, because the last time that he spoke in such a debate, he told us what Labour intended to do in office. When I asked him what its policies would cost, he said that that was an unfair question. I then asked what services would be sacrificed in order to pay for them and he said that that question was even more unfair. Therefore, I suspect that he deliberately avoided giving any details today—but one day, the people of Northern Ireland will want to know what part of the Northern Ireland budget will pay for new Labour's policies.
The hon. Gentleman called for the unqualified application of the social chapter in Northern Ireland. I may be wrong, but I thought that—although it intends to get rid of qualified majority voting—new Labour intended to pick and choose what it wanted from the social chapter. However, the truth came out today, when the hon. Gentleman foreshadowed that the Labour party would implement the social chapter in full. I admire the hon. Gentleman for almost managing—but not quite—to keep a straight face. I am reminded of the remark of a Labour Member who said that in the Labour party one must learn to defend the indefensible. I think that the hon. Gentleman did that pretty well tonight.
We have had an instructive and wide-ranging debate. Obviously, I do not agree with all that has been said, but we have identified a number of important points regarding the Northern Ireland economy. Several hon. Members referred to employment and unemployment in Northern Ireland—issues that are central to any economic debate about any part of the United Kingdom. In a perspicacious speech, my hon. Friend the Member for Basingstoke (Mr. Hunter) made several good points. For example, he pointed to the fact that unemployment in Northern Ireland is now at its lowest level since May 1981.
It is worth registering that unemployment in Northern Ireland has fallen by 20,000 since 1993. It is encouraging to note that some of the biggest falls in unemployment were recorded in areas that were badly affected by violence in the past. For example, in the past year the Belfast, West parliamentary constituency has seen a fall of 14 per cent., which is almost three times the Northern Ireland average. Those figures are particularly relevant in the light of what has been said about the importance of peace to the Northern Ireland economy.
A similar case can be made in terms of employment. The latest available employment figures for December 1995 are 8,550 more than for December 1995 and, encouragingly, they are 6,260 more than for September 1995. The main increase in employment was in the services sector, but employment in manufacturing increased also. Employment in Northern Ireland has risen faster than in the United Kingdom throughout the 1990s. We often identify what is wrong with Northern Ireland, but tonight hon. Members on both sides sounded the trumpet for Northern Ireland. It is right that we should show the world how well Northern Ireland is doing.
Hon. Members referred also to inward investment projects. I have no doubt that the conferences held by my right hon. Friend the Prime Minister in November 1994 and by President Clinton in Washington in May last year contributed to the momentum for investment. It is important to note that, since September 1994, shortly after the IRA ceasefire, there have been 17 new Industrial Development Board-backed inward investment projects involving £360 million in investment and promoting almost 5,000 new jobs. The hon. Member for East Londonderry inquired about inward investment and about what action had flowed from the conferences. It is worth pointing out that there have been significant successes in that period.
The position with regard to output remains encouraging. Since 1991, Northern Ireland manufacturing output has risen by 15 per cent., which is almost twice the United Kingdom average. My hon. Friend the Member for Basingstoke mentioned exports, and I can give him some later and better figures. Since 1991–92, Northern Ireland's exports have risen by 48 per cent., compared with 30 per cent. for the United Kingdom as a whole. That is a welcome sign that Northern Ireland is becoming increasingly competitive and outward looking.
The hon. Members for East Londonderry and for South Down (Mr. McGrady) mentioned the tourist sector. Visitor numbers in 1995 broke all records, with the total number of visitors topping 1.5 million. The number of holiday visitors increased by 67 per cent. to 460,000. Tourism is obviously sensitive to the security situation, but it is encouraging to note that major hotel chains have made two investments worth £26 million since Canary wharf on 9 February. Clearly, the confidence remains to


invest, and I urge hon. Members not to mock investments simply because they are large. Any investment in tourism that demonstrates confidence in Northern Ireland at this time should be widely welcomed.
A vast number of points were raised and I shall try to deal with some of them. The hon. Member for Foyle (Mr. Hume) and others, including the hon. Member for East Londonderry, raised the issue of beef and BSE. He spoke eloquently about a serious problem and I agree with much of what he said.
We are all concerned about the effect of the BSE crisis on Northern Ireland, not least because of the importance of the beef industry to the Northern Ireland economy and the number of jobs that depend on it. We see the European Union export ban impacting more severely on Northern Ireland than on Great Britain because of its greater reliance on exports. The Government's priority is to get the ban lifted and to restore confidence in British beef.
As the hon. Member for East Londonderry pointed out, there will be several opportunities to debate the matter over the next few days, so I shall not spend too much time on it this evening. However, I should refer to the fact that the hon. Member for Foyle argued for separate BSE status from the rest of Great Britain because Northern Ireland has a substantially lower incidence of BSE. He also mentioned the unique computer system that enables its movements to be traced.
There is considerable force in the hon. Gentleman's arguments, but to pursue a separate status for Northern Ireland at this time would be counter-productive to the United Kingdom's principal objective of having the unjustified and illegal ban on the entire United Kingdom beef industry removed. I can assure the House that the Government are committed to continuing and renewing our efforts towards that crucial objective. I was grateful to the hon. Member for East Londonderry for accepting that it has to be achieved on an United Kingdom-wide basis.
The hon. Member for Foyle also asked whether Northern Ireland and the border counties could become a duty-free zone for goods from Northern Ireland to the United States. That is an interesting and somewhat novel concept, but it would involve considerable difficulties that I am sure he would wish to consider. Trade agreements for members of the European Union are made by the European Union on behalf of all member states. Single states cannot make arrangements on their own behalf, still less for parts of member states, as the project would suggest. Therefore, I do not believe that legal powers exist to negotiate separate agreements of that kind.
There would be severe practical problems even if the legal issues could be overcome, which in my view would be highly improbable. The European Union is a customs union with free movement of goods within its borders. Therefore, it would be impossible to distinguish between goods originating in Northern Ireland and the border counties and goods moving through those areas, but originating in other parts of the European Union. In other words, the free trade zone could not be policed and goods from elsewhere would be drawn through Northern Ireland and the border counties and could cause great distortions of trade. It is an interesting concept, but in practical terms it would fail on the basis of a number of those tests.
The hon. Member for Belfast, North (Mr. Walker) made an important speech promoting the city of Belfast. During my three years as a Northern Ireland Minister, I have sometimes thought that Belfast was sitting there waiting to be promoted, but it does not happen often. Tonight the hon. Gentleman made a powerful speech, in which he drew attention to the important developments that have taken place in Belfast and why it is a good place in which to live and invest. I congratulate him on his remarks.
The hon. Gentleman raised a number of significant points, including the importance of concentrating on new technology. As Minister responsible for education in Northern Ireland, I know of the immensely good work within the two universities, which are producing high-quality graduates and, as was also pointed out, are doing so at a lower level of education through the NVQ system. We are now moving towards producing skilled people with a good qualification, who can take up the challenge of new technologies.
The hon. Gentleman referred to Belfast as the city of information, and I am sure that it will not let him down in that respect. Belfast will very much welcome his speech, which I hope will be heard by a wider audience than just the hon. Members present in the Chamber tonight.
The hon. Member for South Down also raised several points. He was worried that he had not seen the peace dividend. That concerns me. When we announced certain adjustments to budgets last year as a result of the onset of relative peace, we made it clear that they were the peace dividend and that if peace were to fail, those programmes would be at risk. We said that deliberately, because it is important to establish that a peace dividend depends on communities underpinning the peace that enables those resources to be made available.
In education, I concentrated on two specific projects. One was the initiative aimed at raising schools' standards, an important initiative that was well targeted towards schools that had faced problems in the past. The second provided assistance for primary 1 classes. Those two clear, distinct policies were made possible by the peace dividend and would not have been possible otherwise. My colleagues did the same in respect of other budgets, and about £286 million was reallocated in that way. I hope that the hon. Gentleman will appreciate not only that those resources were allocated in a specific way, but that he and the rest of the community on all sides in Northern Ireland must be fully aware that, if violence is resumed, those programmes will certainly be placed at severe risk.

Mr. McGrady: I thank the Minister for his additional information. Is he saying categorically that the peace funds were additional to those that would have been required and provided in the budget had peace not broken out?

Mr. Ancram: In respect of those that I control—and I understand that it was the same for my colleagues—it was made clear to us that they were additional funds and that we should find projects on which they could be spent with that in mind. If they were put into mainstream projects, those mainstream projects could be at severe risk if the security position changed. I hope that the hon. Gentleman will pass the message back to the community that peace has a dividend and that the ending of peace has a down side.
Several hon. Members mentioned electricity, including the hon. Member for South Down. We share electricity consumers' disappointment that at present, for a variety of reasons, tariffs are higher in Northern Ireland than in other regions of the United Kingdom. The Government no longer have a role in determining or approving electricity tariffs. The regulation of the privately owned industry is now the responsibility of the independent Director General of Electricity Supply for Northern Ireland.
Action is being taken on a number of fronts to address the problem of higher Northern Ireland electricity prices. In particular, I remind the House—as I have spoken about it in a previous debate—of the announcement on 12 March of £15 million in Government support for electricity consumers. That has enabled the average increase in electricity prices for the current year to be reduced by 3 per cent., to what, in effect, is below the rate of inflation. I hope that hon. Members will realise that that demonstrates the Government's concern.
The hon. Member for South Down made another assertion that requires a brief comment from me. He thought that the Industrial Development Board and the Local Enterprise Development Unit were not providing equity in the distribution of employment-creating projects throughout Northern Ireland. I have heard that before. The IDB now has a target of locating 75 per cent. of all new inward investment in areas of social need. It can give higher rates of grant to companies that go to those areas. The same is true of LEDU, which is making special efforts to concentrate resources and the effort and time of officials in those areas. Those are important signs of our determination to ensure that people in all parts of Northern Ireland benefit from the opportunities that we hope will continue to develop in an atmosphere of peace.
I should point out that, of 17 inward investment announcements made by the IDB since September 1994, three have been in Londonderry, two in Enniskillen, two in west Belfast and one in Newry. Those are all areas of special need. That demonstrates the importance that we place on meeting those particular needs.
The hon. Member for Barnsley, Central mentioned the thorny question of Action for Community Employment. I understand the concerns expressed about the reductions in that programme, which was introduced when unemployment was rising rapidly. Although I do not deny for a moment that unemployment remains a major problem, there are signs of improvement—I gave the House the figures. Unfilled vacancies are at record levels, with more than 7,000 on the books of the Employment Service. Our response was to refocus the use of resources, and that is the reason for the decisions that were taken. As the hon. Gentleman mentioned, my noble Friend Lady Denton announced a £2 million package of transitional measures, to allow the schemes to manage the reduction in their activities.
The hon. Member for Greenock and Port Glasgow (Dr. Godman) went slightly beyond the terms of the motion in mentioning a number of matters, including UK fishing vessel decommissioning schemes. Detailed answers can be made available to the hon. Gentleman, and I shall make sure that that is done. My noble Friend recently welcomed the continuation of the decommissioning scheme, which will operate this year in

the same way as last year, although the eligibility criteria have been widened by comparison with the scheme in the United Kingdom in 1995. Among the changes are that nephrops are now eligible, and the scheme will be open to more vessels by the lowering of the number of eligible days fished from 100 to 75 and the removal of the current restriction on licence type.
The hon. Gentleman made a special plea on ferries. I believe that his concern was directed more at Campbeltown and that part of Argyll than at Northern Ireland, but I shall draw that matter to the attention of my noble Friend Lady Denton and of my hon. Friend the Minister for Railways and Roads. I shall not reply in this debate.

Mr. Hume: May I reiterate, in support of the hon. Member for Greenock and Port Glasgow (Dr. Godman), that a ferry between Scotland and Northern Ireland is the subject of widespread interest in Northern Ireland?

Mr. Ancram: I am not sure whether the right hon. Gentleman was present when the hon. Member for Greenock and Port Glasgow was speaking, but he was honest to say that a ferry would be of great assistance to that part of Argyll.
The hon. Member for East Londonderry raised the question of Benelux in his constituency. I appreciate the concern that exists as a result of what has happened to that company. The IDB has been maintaining close contact with Benelux here and in Hong Kong, and the board has also made contact with a number of potential purchasers. Some have expressed interest, but none has yet entered substantive discussions. The IDB will continue to maintain those contacts.
I hope that I have dealt with most of the points that were raised. If not, I shall as usual write to hon. Members with full answers.
I shall finish with a point that was raised by my right hon. Friend the Minister of State in replying to the opening remarks of the right hon. Member for Lagan Valley, when he spoke about the importance of peace and political stability to the future well-being of Northern Ireland. We all understand that, whatever else we talk about in terms of the quality of life, prosperity and opportunity, at the end of the day those will be underpinned only by political stability and peace. There is not simply the risk that peace dividend reallocations will have to be recovered from the economic and social programmes and restored to the law and order budget. Peace and political progress are critical to the confidence that is the key to industrial and commercial investment and to the growth of industries in Northern Ireland—not least tourism. I cannot over-emphasise the importance of their achievement.
Anyone who claims to have any regard for the economic and social well-being of the people in Northern Ireland, particularly those who have suffered far too long from unemployment, is under the most compelling obligation to bring violence to an end, and for good. Anything else is hypocrisy and a cynical and cruel disservice to the community. Now is the time for dialogue to displace violence and threats of violence. No one can credibly claim that the opportunity for dialogue is being unreasonably withheld. There is a challenge to all


politicians in Northern Ireland and to the Government. We are willing to undertake that challenge on behalf of the people of Northern Ireland. I look to the politicians of Northern Ireland to follow us in that.

Question put and agreed to.

Resolved,
That this House takes note of the Northern Ireland Economic Council's Report No. 118, February 1996.

Cattle Disposal Scheme

Mr. Deputy Speaker (Mr. Michael Morris): I have to announce that Madam Speaker has selected the amendment in the name of the Prime Minister.

Mr. Paul Tyler: I beg to move,
That this House expresses its concern at the continuing delay and confusion arising from the Government's cattle disposal scheme.
On Wednesday, it will be eight weeks since a bombshell was dropped in the House by two Ministers. During that period, a great industry has been devastated and that has already cost thousands of jobs, brought businesses to the brink of bankruptcy and driven many innocent people to despair. The long-term implications for the rural economy have still to be assessed.
My Liberal Democrat colleagues and I have consistently refused to indulge in recriminations about the original bovine spongiform encephalopathy outbreak. It will take time to investigate the full saga—why the outbreak happened in the UK on the scale that it did, why it has continued so long and who may have been responsible for the way in which the disease spread. Time is not on our side. Every day that goes by, with the beef sector still virtually paralysed, not only costs large sums of money but makes full recovery even less likely.
Before I deal with the scheme in detail, I shall dispose of one illusion. No doubt, Euro-sceptic Members will use the debate on Wednesday and Thursday to rail against other EU member states—especially the German and French Governments, now Conservative, with whom the Prime Minister claims to have a special relationship. I hope that the right hon. Gentleman will use that relationship to good effect when President Chirac visits Britain.
The cattle disposal scheme is not a product of the export ban. True, the sabre rattling of some Conservative Back Benchers has not helped Ministers to make rapid progress with solutions. While that was done by the usual suspects on the Tory right wing, perhaps it did not matter much, but, a few days ago, in the middle of sensitive talks, the chairman of the 1922 Committee, no less, started demanding that the Government's allies should be "bludgeoned" into submission. Ministers clearly found that less easy to dismiss. No doubt they had to explain that the organisation in question is just an anachronistic club, that its chairman is of minimal importance, and that the word "bludgeon" is just an old Yorkshire expression for inviting somebody to take a more responsible view.
Tonight's debate is about a home-grown crisis facing the entire British beef industry. Of course the export ban is irrational. We must have it lifted and get rid of it, because no scientific basis for it remains. However, that ban is not responsible for the devastation that concerns us in this debate.

Mr. David Nicholson: I am grateful to the hon. Gentleman for giving way so early in his speech. He referred in his opening sentence to a bombshell being dropped on the industry in the House. He will recall the Minister's response to the statement by the hon. Member for Huddersfield (Mr. Sheerman) in the House last Thursday, when he said that the Secretary of State for


Health had precipitated the crisis. In the Western Morning News of 27 March, Mr. Graham Watson, the Liberal Democrat Member of the European Parliament for Somerset and North Devon, said:
If the Government had set out to cause mass panic they could not have gone about it in a more destructive fashion.
Are the hon. Gentleman, the hon. Member for Huddersfield and the Liberal Democrat Member of the European Parliament suggesting that our colleagues should have kept silent about the research which regrettably gave rise to this problem?

Mr. Tyler: Of course not. No doubt the hon. Gentleman will make an equally long speech if he catches the Chair's eye later, but as my speech develops he will get his answer.
The Government have accepted that the cattle disposal scheme is in their hands—it is their responsibility. In response to my private notice question last Tuesday, the Minister of State—he is in his place now—said:
I am driving the scheme and I accept full responsibility for it."—[Official Report, 7 May 1996; Vol. 277, c. 20.]
So the buck stops with the Minister, not with Brussels. Indeed, he slapped down the hon. Member for Teignbridge (Mr. Nicholls), who suggested later that the problem was the fault of "the Europeans". The Minister, the right hon. and learned Member for Grantham (Mr. Hogg) and the Prime Minister all made similar statements later last week about the Government's responsibility—and they were right.

Mr. Patrick Nicholls: In the exchange to which the hon. Gentleman has been kind enough to refer, I made the point that the beef ban was completely illegal and in defiance of all scientific opinion. How, therefore, can the hon. Gentleman have the effrontery to stand up and say what he has said when his party—the self-confessed federast party—would give away our remaining veto?

Mr. Tyler: I am sorry that I gave way; that was a ludicrous waste of the House's time. My point was simply the same as the Minister's: the cattle disposal scheme does not depend on the export ban being removed or vice versa. It is a separate issue that must be dealt with properly by Ministers. I know that they will attempt to do that during this evening's debate.

Mr. Elfyn Llwyd: I met the Minister on Thursday. The best that he could offer Wales was marrying up some renderers with one abattoir in north Wales and one in south Wales—for the whole country. Does the hon. Gentleman agree that the scheme just is not a starter in Wales at this stage?

Mr. Tyler: I do agree—I shall come to that very issue. I return to my point that Ministers have frankly accepted responsibility for the scheme. Indeed, they can do no other because everyone knows that they are responsible for what has gone wrong. A poll in The Guardian on Friday showed that only 18 per cent. of the public blame the European Union for the beef crisis, while 45 per cent. blame the Government.
The scheme was dreamt up, designed and built in Whitehall. Anyone who suggests that it has been imported from the continent is trying to distract attention, to pass the buck, or to fight private battles.

Mr. Paul Marland: rose—

Mr. Tyler: I shall give way later to the hon. Gentleman if he will be patient.
The House will know—I expect the hon. Gentleman knows—that there is now a shrewd suspicion among some of the victims of this calamity that some Conservative Members—only a minority, I am glad to say—are engaged in a fierce civil war over Europe in their party and want the ban to continue for as long as possible so that they can say that it is the fault of the Europeans. The Minister gave vent to frustration at their antics after the talks in Italy last week, and he was quite right. The president of the National Farmers Union was similarly scathing, warning that extra delays might occur as a result of their antics.
After nearly eight weeks, the disposal scheme is still characterised by dither and delay. If any hon. Member has not been briefed by his or her constituents over the weekend, let me read a brief extract from the editorial in this week's Farmers Weekly. Under the headline
Chaos Reigns as MAFF Makes a Hash of its BSE Slaughter Scheme",
the editorial reads:
Producers with cattle over 30 months old must be wondering what on earth the Government is playing at. Only a scriptwriter for a Whitehall farce could derive any satisfaction from its handling of the scheme to remove older cattle from the food chain.
[Interruption.] It continues:
According to the NFU, it could take a year before the back-log is cleared. Many of the 100,000 cattle stuck on farms will be prime animals in late-maturing, grass-fed herds, caught up in this fiasco because, like cull cows, they are deemed unfit for human consumption…Beef producers are left waiting for compensation. So far, almost two months into this crisis, they have received nothing.
[Interruption.] It says:
The calf slaughter scheme does not apply to them and intervention has proved almost worthless. Those with cattle on farms are left wondering how to minimise their losses. They must know soon whether top-up compensation is to be paid after the first four weeks and at what rate. Their state of confusion is inexcusable".

Mr. Alex Carlile: Given some of the sedentary interventions suggesting that my hon. Friend is out of date, would he agree with Mr. John Jones of Welshpool Livestock Auctioneers who has commented from today's livestock mart that the situation remains utterly chaotic because MAFF and the Welsh Office have licensed so few abattoirs?
Is my hon. Friend further aware that marts such as the huge and important Welshpool mart cannot place the beasts which they need to place in abattoirs? Mr. John Jones tells me that he has managed to find space for 35 of 2,000 candidates for slaughter from his mart alone. Will my hon. Friend join me in begging Ministers to increase the number of abattoirs licensed for the cull?

Mr. Tyler: I am grateful to my hon. and learned Friend for making that point, to which I shall come directly. If any Conservative Member has not been listening to abattoir managers and farmers during the past few days, he should get on the telephone this evening and find out what they are saying. I have talked to farmers as far apart as Lewes in Sussex, Dartmouth in Devon, Boston in Lincolnshire and Widnes in Cheshire. They describe the


situation as a shambles—precisely what the Welsh Farmers Union said. The renderers are saying that the scheme will grind to a halt almost immediately; and the Scots are so desperate that they have turned to the Prime Minister and asked him to intervene—as if that were going to help.
With the help of the NFU and discussions with many others, I have been able to identify six principal concerns. As my hon. and learned Friend the Member for Montgomery (Mr. Carlile) rightly said, the reduction in the number of collection centres is a disaster. Last Tuesday, the Minister told me:
Some 104 livestock markets and some 72 abattoirs have been approved as collection centres.
He wanted, he said,
to ensure a proper geographical coverage of collection centres—both slaughterhouses and livestock markets."—[Official Report, 7 May 1996; Vol. 277, c.20.]
He said that about 200 had applied to join the scheme. There followed pressure from both sides of the House to the effect that that was not enough. I recall the hon. Member for St. Ives (Mr. Harris) making that very point.
Later in the week, we heard that the Minister was prepared to be flexible. More centres would be added—perhaps as many as 100. At the weekend, however, the renderers appeared to have the Government over a barrel, despite the Minister's promises last week that he had them under control. As a result, only 21 in the whole of England and Wales are to be licensed for the foreseeable future. Although MAFF has approved 96 abattoirs and 186 livestock markets to operate the scheme, the renderers are refusing to play ball. As the NFU said:
The Government have consistently refused to establish a proper administrative framework for the scheme in England and Wales. In the absence of such a framework, renderers have indicated that, in England and Wales, they will deal with 21 abattoirs. These will meet their current maximum throughput of 18,000 carcases a week. This figure will rise to some 25,000 carcases a week only after several weeks. If these were the only cattle to be entered into the scheme, it would take up to a year to eliminate the backlog on farms which, across the United Kingdom as a whole, is estimated to be over 300,000. Each week a further 12,000 cull cows will join this backlog.
In the meantime, businesses are being ruined. I want to quote one specific case from one of the many letters that I have received. This one comes from Skegness and District Meat Traders Ltd. The group was on the Minister's schedule, sent to every Member of the House on 2 May—a designated and approved collection centre. The traders write:
We applied and were passed and accepted by the Intervention Board as suitable to take part in the scheme. All arrangements with the Meat Hygiene Service, the Meat and Livestock Commission, local rendering plant, local hide collection had been confirmed. 100 cattle from local farms were booked in to come to us from 7 am on Saturday.
We had agreed to slaughter on 3 days per week to try and take the pressure off local farmers in our area, many with severe cash flow problems due to delays in the whole situation…We understand from information given to us in the last hour that the nearest abattoir is at Shrewsbury, only two in the whole Midlands area &We at this moment are destroyed, we don't know what to do, please, please help us!

Mr. A. J. Beith: Other marts on the list approved by the Government were unable to

start the scheme because they were under the impression that they had to have a registration number after being inspected by the state veterinary service. When one of the marts in my constituency telephoned the intervention board, it spoke to a 15-year-old schoolchild on work experience who was unable to say whether it could start the scheme without state veterinary inspections.

Mr. Tyler: Such experiences have taken place all over the country in the past few days. I have had abattoirs ringing me today in desperation because they cannot get clear advice from the Ministry, the intervention board, or any other authority.

Mr. Marland: The hon. Gentleman is being very selective and he is out of date. He is not the only one who has been making telephone calls to find out what has been going on, because I have done exactly the same. I spoke to Gloucester market this morning and I was told that the situation is now working very smoothly. Of course, there have been a few hiccups along the way, but that is why I said that the hon. Gentleman is out of date. I stand by that. He quoted from a Farmers Weekly which is a week old and the article he read out must have been written at least 10 days ago. The situation is now moving ahead smoothly and the scheme is working.

Mr. Tyler: The hon. Gentleman is talking through his hat. He clearly does not read Farmers Weekly. I quoted Friday's edition—10 May—and I checked today about the information given. It is absolutely accurate. It may be that there is one place where the scheme is now in operation. If that is in Gloucester, good luck to Gloucester, but all over the country that is not the case.
Another of the statements that I have received today from a vet says:
animals will have to travel much greater distances into large, factory abattoirs—remember these include some of the weakest and infirm of all cattle, the cow at the end of her working life.
I will come to the issue of casualty stock in a minute, because the animal welfare implications are causing considerable concern.

Mr. Marland: Will the hon. Gentleman give way?

Mr. Tyler: I will not give way. If the hon. Gentleman cares to pick up the phone and to talk to the National Farmers Union, he will find that his information is incorrect. [Interruption.]

Mr. Deputy Speaker: Order. We do not need the hon. and learned Member for Montgomery (Mr. Carlile) waving his hands and interfering in the debate from a sedentary position.

Mr. Tyler: I am sure that you will understand, Mr. Deputy Speaker, the frustration and anger that many of us feel that our constituents have been put into an impossible situation. Mishandling of the crisis is causing real human misery, as well as animal misery.
The issue of the distortion between live weight and dead weight caused concern to many hon. Members from both sides of the House last week and is certainly not resolved. The regulation authorising the scheme, approved by the Beef Management Committee on 12 April,


envisaged that animals would be brought into the scheme only at live weight centres, that is, at auction markets. That would have distorted the normal patterns of trade in older cattle, because some 50 per cent. are normally sold dead weight and it would have caused especial difficulty to those farmers who normally sell dead weight.
It was not until 26 April that the committee allowed dead weight purchase. It rejected the proposal, made by the slaughterers and by the NFU on behalf of farmers, to use an accurate conversion coefficient. Accordingly, the scheme encourages farmers to enter their steers and heifers into the scheme at the abattoirs instead of the normal marketing channels. Naturally, that is making the present blockage in the abattoirs even worse because everyone is trying to clamber in there as fast as possible. Last week, hon. Members warned the Government that that would happen, and nothing has been done to correct the distortion.
On the issue of valuation for compensation, beef farmers are facing huge losses. This morning, one south Devon specialist producer told me that he anticipates that his total loss will be in the region of £100,000 as a result of the crisis and the way that it has been handled.
Steers and heifers are, of course, considerably more valuable than cull cows. The EU-approved compensation rate is adequate to cover most of the losses sustained by the holders of cull cows, but it is far below the costs of production of steers and heifers. Hon. Members from both sides know that and they have been pressing the Government as we have.
The Government attempted to resolve the problem by agreeing to pay a 26p a kilogram live weight top-up. That supplement was first to be paid for the first four weeks, then during May, then until 10 June and finally on all steers and heifers on farms on 20 March whenever they are taken into the scheme. That is slow progress but, as the House will recognise, very confusing.
Meanwhile, a group of producers from the south-west has taken the initiative. The producers went to Brussels, they met the Commission and they sought a more flexible, realistic and fair compensation package. In brief, they wanted a full-price support scheme for suckler cows, with compensation for all cattle known to come from herds that have been hit by BSE, which they said would be essential to solve the problem. The reaction of the Commission is important. It said that the producers' ideas were well worth examining, but it told the farmers that they had to discuss the matter with MAFF. The matter is entirely in the hands of the United Kingdom's Ministers and not in the hands of the Commission. As one of the farmers who helped to put together the submission said to me today,
I solely blame the Minister of Agriculture for his lack of understanding and speed to solve this crisis.
I will gladly provide details of that statement to the Minister.
The 30-month deadline caused consternation, not only in the House but in all parts of the industry. Who first floated the idea of the 30-month deadline? Strictly speaking, it was not the Spongiform Encephalopathy Advisory Committee, which merely referred to it as a handy threshold, with some scientific basis, for deciding when deboning and destruction of offal should become compulsory. The idea that 30 months should be an indiscriminate deadline for any meat to prevent it from

entering the human or animal feed chain seems to have come from the Minister of Agriculture, Fisheries and Food himself.
I refer the House to an important article in The Daily Telegraph by Christopher Booker and Richard North, who pointed the finger of blame in the Minister's direction. In interviews in the immediate aftermath of the first statement, the Minister referred to the possibility of a 30-month deadline, and to the possibility of culling "millions of cattle". Nobody had raised that issue until the Minister himself did. That overreaction, or overkill, did not start in Brussels, Bonn or Paris. It started in Whitehall, and hon. Members will agree with that.
At long last, after weeks of pressure, from us and from many others, the Government are examining the practicalities of what is called a "mature beef assurance scheme". Good. Exemptions are clearly essential for herds and breeds that can be demonstrated to be at low risk—Dexters is an obvious example, but there are many others. Otherwise, not only will perfectly healthy cattle be slaughtered—that raises legal as well as moral issues—but the scientific rationale for the whole of the Government's scheme will be killed off too.
Why are we still waiting? Why was the issue not addressed six weeks ago, in informal discussions with the Commission and the industry? When I visited Brussels and met Commissioner Fischler's team exactly three weeks ago, I was staggered to find that it had received no proposals, ideas or details at all from MAFF on that vital aspect of the problem. Even though such a scheme might not have achieved a partial relaxation of the export ban immediately, would it not have been wise to consult on exemptions? The Commission seems very receptive to the case for the later-maturing, naturally reared and fed prime beef, including those on organic farms. Why did our Ministers not push open that door and get the Commission's support early on? To come back now with the mature assurance scheme will be much more difficult.
In the meantime, the many delays in progressing the scheme have caused especial difficulty for those farmers who would normally have marketed their 30-month-old cattle in late March, April or early May. Those farmers are facing not only shortfalls in cash flow, but the cost of feeding their animals. I know that the hon. Member for Ryedale (Mr. Greenway) has made that point in the House before.

Mr. John Greenway: The hon. Gentleman is right to say that there is a serious welfare issue for the cattle that should have been slaughtered in the last week of March. There is no market for them. They are over 30 months of age and the market has gone because of the European Union's ban. May I help the hon. Gentleman with where the 30-month ban came from? If he reads today's National Farmers Union briefing, he will find that it came from the farming community.

Mr. Tyler: That is not true. I met the president of the National Farmers Union after the scheme had already been floated by the Minister of Agriculture, Fisheries and Food—he did so on television—in the previous three days. The hon. Gentleman is not correct on that point. I accept his support, however, and I am grateful to him. It is—

Mr. Greenway: Will the hon. Gentleman give way?

Mr. Tyler: No.
As the delays lengthened and the prospects of a rapid reduction in the backlog of cattle receded, the NFU became more and more determined to secure urgent priority for entry of animals into the scheme.
Delays in starting the scheme have led to huge problems in dealing with casualty stock. All scheme abattoirs must be required to take such stock to minimise animal welfare difficulties. In some major livestock areas of Britain—the highlands of Scotland, mid-Wales and the west country, for example—the combination of large numbers of cattle and small numbers of approved slaughter facilities is causing consternation. The south-west region of the NFU briefed me today. It told me that only three abattoirs are operating within the whole of its area. It commented:
Although all abattoirs in the scheme will be required to make arrangements to deal with casualty stock, the lack of abattoirs in the scheme at the current time will mean excessively long journeys for some casualty animals and we will continue to lobby the renderers to take these animals from the local abattoirs which currently specialise in casualties.
Good for the NFU, but what is the Ministry doing? How can it mitigate the extra costs and avoid the risk of do-it-yourself slaughter, when farmers who are already in dire straits are faced with extra burdens?
In endorsing many of the issues to which I have referred, the Sussex farmers, whom I met near Lewes on Thursday, are especially frustrated with the calf slaughter scheme. Other farmers from Somerset to Sunderland have raised the same anxieties. The time scale is impossible. The intervention board is asking for precise notice of numbers three days in advance. The farmer can give notice only three days after birth. Delivery must take place within seven to 10 days. The window of opportunity is just too narrow. Real difficulties are arising in what is already a fraught situation. There appears to be no logical reason not to introduce an extension to at least 14 days. Surely that would be more reasonable.
In supporting that view, Messrs Snells, the wholesale butchers at Chard, Somerset, say that
most abattoirs are killing calves at specific times on two days a week. This makes the ten day rule even harder.
The company comments that the two-hour limit for calves to arrive at the abattoir to be inspected is very tight, especially when a large consignment arrives.
The net sum that the farmer receives can be as little as £50, once all the others in the chain have taken their cut. Many producers are simply holding on to their Holstein calves. Where will they end up?
I have had time only to touch on the catalogue of problems from which the beef industry is reeling on the 55th day after the original BSE announcement. I could have provided more detail about the fate of the cattle head deboners. Their business was abolished overnight by the Minister's new regulations. No compensation was payable. It is difficult to think of any other industry that could be driven out of business by the failure of Government policy and have no redress. It is surely scant comfort for the deboners to be told, as Messrs Touchmead of Amesbury was advised by its Member of Parliament, that it should diversify.
There is the absurd fiasco that stems from proving the age of young heifers. Calling in the dentist proved to be a ludicrously inefficient option. A proper registration

scheme seems to be a long way off. Vets are naturally reluctant to act as the Government's policemen, especially without even being consulted. I hope that the Minister will be able to tell us whether the vets have now been consulted.
Another factor is the power of supermarkets. They seem to be dictating what happens. Their activities deserve careful scrutiny. I understand that they threatened to undermine the best laid plans of Ministers by insisting that abattoirs do not process both cull cattle and beef for human consumption. That may be reasonable in some areas, but in other more remote areas there will be great difficulties. I see one or two Conservative Members nodding in agreement. The Minister failed completely to respond when my hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes) put the matter to him on Thursday.
The chairman of the south-west region of the NFU wrote during the weekend to my right hon. Friend the Member for Yeovil (Mr. Ashdown). He stated:
We are drifting daily into a very serious situation. Apart from the financial problems being experienced by our members there are the practical problems of feed and welfare. The uncertainties of it all are causing immense despair and there is of course huge long term damage being caused, not only to farming businesses, but to all allied trades as well.
There is not a farmer, a market manager, an abattoir owner or anyone else in the beef industry who will share the complacency that is set out in the Government's amendment. If Conservative Members had listened to their constituents during the past seven horrendous weeks, they, too, would find it impossible to hail the "progress" to which the amendment refers. Far from the Ministry driving the scheme, it seems to have been hijacked by the renderers and the supermarkets.
The purpose of the Minister's scheme is to hasten the eradication of BSE from the national herd, and by so doing to re-establish consumer confidence at home and abroad. My colleagues and I fully share that objective. Indeed, the objective is not in dispute. So far, however, it has been a dismal failure. No doubt the Ministry had a contingency plan, even if it did not have one before November 1995. Surely such a scheme must then have been initiated. Any responsible Government would surely have put a contingency plan in place immediately. If the Government did that, what was the plan? Was it what we now see? If so, why have things taken so long? Those whose livelihoods hang in the balance because of the debacle, given the dither and delay that have taken place over 55 days, are losing their patience.
I shall end with a quotation from a statement drafted by two Cornish farmers' wives. It was signed by 450 others from throughout the west country. They describe themselves as the
farming community who are made to bear the brunt of political blunders.
They refer to
the irreparable damage to our industry"—
that is the livestock industry, as the
innocent victim of misdemeanours.
They ask whether the cattle feed producers will be prosecuted. They comment:
After all, according to the scientists, this is where BSE originated, unknown to the farmer. These producers added the likes of sheep remains and offal etc. to cattle feed after the Government lifted regulations regarding the contents.


After 55 days of chaos and confusion, all those questions cannot remain unanswered any longer.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Tony Baldry): I beg to move, To leave out from "House" to the end of the Question and to add instead thereof:
welcomes the Government's commitment to restoring consumer confidence in the UK beef industry by introducing a slaughter scheme for cattle over the age of 30 months; notes the progress made in the 30-month scheme; recognises the dependence of the scheme on co-operation between farmers, auctioneers, slaughterers and renderers and welcomes the steps taken to foster such co-operation to ensure that the maximum slaughter rates are achieved.
I welcome the opportunity to answer the questions posed by the hon. Member for North Cornwall (Mr. Tyler), who has come to the House to debate the 30-month cull without knowing who proposed it. It is clear that he has not even had the courtesy to read the briefing sent to every hon. Member by the National Farmers Union.
The announcement on 20 March by the Spongiform Encephalopathy Advisory Committee that the most likely explanation of some recent cases of Creutzfeldt-Jakob disease was exposure to bovine spongiform encephalopathy before 1989 had an immediate and devastating impact on many people, including thousands of farmers throughout the country. I fully appreciate what a painful and frustrating time they, their friends and their family have had recently. None of us can be insensitive to the difficulties that so many farmers have experienced.
I welcome the debate because it provides an opportunity for me to set out clearly the issues that I have had to confront. The House is made up of reasonable people, and I believe that, having heard what I have to say, it will conclude that all has been, and is being, done at all possible speed to ensure that the 30-month cull scheme works efficiently and effectively and that farmers will be able to move relevant stock from their fields as speedily as possible. They rightly and understandably want to be paid compensation as soon as possible, and I want them to receive it as soon as possible.
The hon. Member for North Cornwall spent the first five minutes of his speech trying to ascribe responsibility for the scheme. I could have saved him that five minutes. I accept full responsibility for ensuring the success of the scheme, which is why, each day, I convene and chair a meeting of all the relevant interests—farmers, those who work in abattoirs, renderers, members of the retail industry, vets and others. Many people are involved, and we must appreciate the number of complexities involved in this unprecedented scheme.
It is worth briefly recalling the time scale. In statements issued on 20 and 24 March, SEAC recommended—among other things—that the carcases of cattle aged over 30 months be deboned in licensed plants under the supervision of the Meat Hygiene Service. That is where the reference to 30 months first appeared. That recommendation gave a particular and immediate significance to the 30-month limit.
At once, retailers, keen to help restore confidence in British beef, wanted to be able to confirm to customers that they were selling only young beef, and that there was

no possibility of older beef being on their shelves. Almost immediately, retailers told meat merchants and farmers that they were no longer willing to accept beef from animals aged 30 months and over. At a meeting on 25 March, retailer and farmer representatives decided to ask the Government to buy cattle aged 30 months and over to ensure that their meat and offal were removed from the human and animal food chain. That day, they came to see my right hon. and learned Friend the Minister and me, and we readily agreed to seek to implement the measure, in co-operation with retailers, farmers and others, as part of the moves to help restore confidence in British beef here and overseas.
If the hon. Member for North Cornwall feels at all confused about the origin of the scheme, he need only read the brief sent by the NFU to all Members of Parliament. It states:
Taken together … a substantial proportion of our market had disappeared
because the retailers, processors and caterers had informed the NFU that they were no longer willing to accept beef from carcases of cattle aged 30 months and over.
The NFU reacted to these … events by requesting the UK Government to purchase cattle aged 30 months and older and to ensure that their meat and offals were removed from the human and animal food chain.
That request was made to us on 25 March. We had obtained all the necessary clearances and agreed to it by 28 March, and by 3 April we had secured the Council of Ministers' agreement to Community funding of the costs of buying cattle into the scheme. I hope that no one will believe that any of the negotiations with Community colleagues have been particularly easy. At that meeting on 3 April, compensation payments were set at 1 ecu per kg for cattle purchased live—approximately 86p per kg—and double that rate for dead weight. That decision was to prove significant later.
In its briefing, the NFU rightly described our response to it and the retailers as "rapid and welcome" but, obviously, it took a little time to negotiate the details of such a complex scheme—its complexity was unprecedented, here and elsewhere in Europe—with Community colleagues. The basic regulation, however, was adopted on 12 April—again, very rapidly.
I note that the Opposition Benches seem to be emptying. No Labour Back Benchers have been present throughout the debate, and the Liberal Democrats now seem to be filing out of the Chamber. I hope, however, that Conservative Members who are concerned about these matters will pay attention to the chronology. It was necessary to seek amendments to the basic regulations twice, on both occasions to meet concerns expressed by the NFU, the Country Landowners Association and other farming interests. The hon. and learned Member for Montgomery (Mr. Carlile) intervened from a sedentary position earlier to say that we had not listened. We have listened carefully. We have sought to meet the legitimate concerns of farming and other interests, and throughout the process I have tried to respond to those understandable concerns.
The first issue on which we sought, and succeeded in obtaining, the Community's agreement was the provision of a nationally funded supplement to be payable on steers and heifers. Steers and heifers aged over 30 months are


considerably more valuable than cull cows that have reached the end of their milking lives. While the original compensation rates agreed by the Community were adequate to cover losses being sustained by owners of cull cows, it was felt that they did not fairly meet the costs of rearing steers and heifers. That is why we agreed, and made clear, that there would be a top-up payment of not less than 25p per kg live weight for the first four weeks of the scheme, after which a review would take place.
I have decided that the review should take place on 15 June. Because it is possible—indeed probable—that not all steers and heifers aged more than 30 months on 30 March will have been slaughtered by then, I have agreed that those animals will attract, and continue to attract, the top-up payment of 25p whenever they come to be slaughtered. In other words, any farmer who has heifers and steers on his farm that were there and more than 30 months old on 20 March will receive a 25p top-up payment whenever his cattle are slaughtered. I hope that that goes some way towards allaying the concerns of farmers who, understandably, were particularly anxious to get their cattle through the scheme while they thought the 25p top-up rate was available.
The hon. Member for North Cornwall mentioned that other NFU members wanted another scheme. If that is the case, they certainly have not put it to me through the union. If they had, I would have considered it. I think that there is a general recognition by the NFU, the CLA and other farming interests that the 25p top-up is very fair, especially if it applies to every heifer and steer that was on farms on the relevant date of 20 March and it is available whenever such a beast is slaughtered.

Mr. Alex Carlile: If the scheme that the Minister has described is to work, the cull must not merely be announced, but take place. Why will he not announce today a substantial increase in the number of available abattoirs—including those in Wales—so that it can take place? Will the industry receive a response to the legitimate concerns that it has raised repeatedly with the Minister in meetings, including a meeting involving John Jones of Welshpool Livestock Auctioneers, to whom I referred earlier?

Mr. Baldry: I hope that the hon. and learned Gentleman—and, indeed, every Member of Parliament from an English or Welsh constituency—received a letter from me today explaining the position. The letters were sent first class on Friday, and I made certain that every hon. Member would receive a copy. I trust that the hon. and learned Gentleman read in the letter about the logistical difficulties caused by the finite nature of rendering capacity—which I shall explain in a moment—and about the position in Wales, which I set out in terms.
There are no renderers in Wales, and I cannot create any by means of some divine intervention. Because, under the scheme, every beast must be rendered in its entirety, it must be matched with rendering capacity in England. That is why I made it clear in the letter that I sent the hon. and learned Gentleman and every other colleague that, under the scheme, I had designated three abattoirs specifically to take cattle from Wales: Anglesey, Abergavenny and Shrewsbury. If the hon. and learned Gentleman adds up the take—on the back of the

"Dear Colleague" letter, the abattoirs and their throughput are set out—he will find that, together, those three abattoirs will take 25 per cent. of the initial kill. The Welsh herd is 16.5 per cent. of the national total so, rather than doing less well, the Welsh community is doing slightly better than average in the first few weeks.
The second amendment of the scheme that was necessary was not achieved until 5 pm on 26 April—again at the request of the NFU and the CLA—when the European Community agreed that there should be a dead weight option on the scheme.

Sir Hector Monro: We are now having a good deal of success in Scotland. A significant number of beasts have gone to the slaughterhouse—the number is now in the thousands rather than in the hundreds—but may I take my hon. Friend back a short while to heifers, which are at a full stop? No one is taking heifers at the moment. May we have a simpler method of arriving at the heifer age than the four teeth, because they must be got away soon? No one, however, seems to know quite how we are to do it.

Mr. Baldry: There are two points there. First, we hope and intend to have an identification scheme for all heifers by next month. Secondly, the CLA, the NFU and all farming interests that have made representations to me—I think that this has been agreed by everyone—have said that, given the problems of people who have heifers and steers, under the scheme, priority in the first instance should be given to clean beef.

Mr. John Greenway: My hon. Friend is right in all that he has said to the House and I am most grateful for his work in trying to resolve the extremely difficult problem of matching rendering capacity to the requirement for slaughter through abattoirs, but the fact is that there is just not enough rendering capacity. The need, however, to bring forward more cattle for early slaughter is extremely great. Will he consider using all available cold storage facilities so that we can have cattle in a large number of abattoirs and so that we can target a bigger number than the 25,000 per week that he is talking about slaughtering?

Mr. Baldry: Absolutely. Again, as I hope every colleague will have read, in the letter that I sent them on Friday I set that out in terms. Of course we have a finite rendering capacity. I cannot do anything to change that. What I can do is increase the rate of slaughter by bringing on more cold storage and, having rendered only those parts of each animal that need immediately to be rendered, store the rest for it to be rendered later. At present, I estimate that, under the scheme, the throughput in England and Wales is some 18,000 beasts a week. I hope that, in the next few weeks—I enclosed a bar chart showing every hon. Member how I saw the progress of the scheme—we will increase that figure to 22,000 beasts a week and start to make some real dent in the backlog, as well as keep up to date with the immediate scheme.

Mr. Marland: Does my hon. Friend agree that it is astonishing that, not even an hour into this debate in Liberal party time, two senior Liberal party spokesmen, not having read the NFU brief and not knowing whether there are any renderers in Wales, have been shown to have


done so little homework? It is a disgraceful performance by the Liberal party. Does my hon. Friend agree that that lack of homework undermines everything that they have been saying?

Mr. Baldry: What is disappointing is this. Everyone recognises that these are unprecedented circumstances that have been created by no one in the House and by no one in particular in the farming community or elsewhere. SEAC made proper recommendations, which we have sought to act on and to which, as I have described, the market has responded. Since then, we have all been seeking to work co-operatively. If the NFU and the CLA came to hon. Members and said, "We believe that the Minister of State has grossly failed"—or, indeed, failed at all—"in his duties," it would be right to have such a debate in the House, but in my meetings with the NFU, the CLA and other interest groups, I have persistently said, "Is there any issue that you wish me to consider that you feel I have not fully considered and taken action on?" I am confident that there is no issue that I have been asked to take forward by the various interests that I have not taken forward.

Several hon. Members: rose—

Mr. Baldry: I should like to make some progress.
Farmers and, I think, everyone else involved in the beef industry were anxious that, so far as possible, the 30-month cull programme should not disrupt existing patterns of business. Although many farmers continue to take their cattle to their livestock markets to sell, in recent years, there has been an increasing trend towards selling cattle dead weight—selling them direct to the abattoir. The NFU and the CLA were anxious that those traditional marketing patterns should be continued and we recognise that many producers prefer cattle to be marketed direct from farm to abattoir.
That is why, at the request of farming unions and of abattoir owners, we pressed the European Commission for changes in the regulations to enable such direct sales to continue. Again, those were not easy negotiations. I think that it is fair to say that there was a fair deal of suspicion, and considerable reticence, on the part of some Community colleagues about allowing the scheme to continue with a dead weight option, as they believed that it would become even more flexible and potentially more expensive.
Ideally, it would have been possible to secure agreement to a set of conversion coefficients from dead weight to live weight which would vary according to the type of beast—for example, one coefficient for cows, another for steers and another for heifers. There were two constraints. Importantly, the conclusions that have already been reached, and which I have mentioned, by the Council of Agriculture Ministers at their meeting on 3 April, in which a conversion coefficient from dead weight to live weight of two is clearly implied, combined with the reluctance of officials elsewhere in Europe to make the scheme even more flexible, meant that, within the politics of the possible, a coefficient of 2:1 was the best achievable in all the circumstances.
I do not think that there is any disagreement that that coefficient is slightly ungenerous for cull cows, but it has the advantage that it offers a better return than would

otherwise be available on steers and heifers. It therefore serves to boost the returns of the specialist beef farmers. As that group was especially concerned that it had been disadvantaged by the earlier compensation measures, that potentially extra money has been welcomed by farmers unions.
I appreciate that concerns have been expressed, especially by people representing the livestock marts, that the coefficient will tend to encourage producers of steers and heifers to make use of the dead weight option rather than sell their cattle through live auction marts, but as I said, a significant number of clean cattle have been going dead weight recently. For cull cows, the coefficient is likely to favour sale through auction marts. When I have discussed this issue, at some length, with the leaders of the NFU and the CLA, that has certainly been their collective view.
Once the backlog of cattle on farms is reduced, the majority of cattle slaughtered under the scheme will be cull cows, so the coefficients that we have are to the advantage of specialist beef producers, who will receive more for their cattle, and the owners of cull cows. I am sure that, under the scheme, live markets will continue to play an important role, and I say that as the hon. Member for Banbury—the centre of my constituency has the largest cattle market in Europe.
Incidentally, I am glad that the people who represent the abattoirs nationally have agreed to protocols with the livestock markets to ensure the full participation of designated licensed markets as collection points under the scheme. Under the agreed protocol, abattoirs will give an allocation to livestock marts of 30-month scheme animals on the basis of the proportion of business that they were taking from livestock marts before 20 March. In that way, both the livestock marts and the abattoirs hope that the livestock marts will be able to play a valuable role in acting as collection centres and to be confident that they will then have abattoir and rendering facilities available to them. I congratulate both the livestock marts and the abattoirs on their constructive approach on the matter.

Mr. Beith: The Minister seems to be aware of the problem, but is perhaps underestimating its seriousness. If on a 700 kg animal there is a £200 premium for treating it as dead weight, specialist beef farmers will be drawn into using the abattoir directly, thereby putting the local mart, upon which they depend in good times, out of business. Other beef farmers will find it impractical to take that option, and will be at a financial loss.

Mr. Baldry: I know that none of the farm interests would wish to have the dead weight option or the dead weight coefficients taken away. If Liberal Democrat Members went out into the highways and byways saying that they would take this money away from farmers, they would receive a dusty response. It is recognised that there are swings and roundabouts. I suspect that more business will go live weight through cull cows to the livestock marts because the coefficients make it to farmers' advantage to do it that way. There will be considerable benefits to clean beef producers of going to abattoirs and to the owners of cull cows of going to the livestock mart. The fact that abattoirs and livestock marts have agreed a


basis on which cattle can be called forward from livestock marts that are collection centres to be dealt with by the abattoirs is good news.

Mr. Nicholls: My hon. Friend has said a number of times that he cannot be expected to conjure rendering facilities out of thin air. Perhaps he can speak about a particular problem that has been put to me by the NFU. It concerns casualty animals. Does he feel able to say to the United Kingdom Renderers Association that it is artificially restricting its activity to 20 abattoirs and that one of the consequences is that it is virtually impossible to dispose of casualty animals humanely? That is a well-founded point and, although it is not the Minister's fault, he may be able to do something about it.

Mr. Baldry: I certainly intend to speak about casualty stock. The hon. Member for North Cornwall mentioned six points, and I intend to deal with all of them. One concerned casualty animals. I hope to be able to reassure my hon. Friend that we have in place proper provision for casualty stock. I shall continue to tell every abattoir in the scheme—not just the 21 that are in it at the moment, but the larger number which I hope will come into it—that a precondition of being in the scheme is that they must take a commonsense approach to casualty animals that are in need of emergency slaughter. I shall deal with that in greater detail.

Dame Elaine Kellett-Bowman: rose—

Mr. Tyler: rose—

Mr. Baldry: The hon. Member for North Cornwall is brave if he thinks that he can come between me and my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman).

Dame Elaine Kellett-Bowman: I thank my hon. Friend and the Ministry of Agriculture, Fisheries and Food for having the good sense to choose Lancaster as one of the centres. It has a popular auction and many live weight cattle are brought to it. We are delighted about that, but there is a slight problem in that, like others, we are rather short of abattoir space. Would it be possible to open in the near future the abattoirs at Clitheroe and Oldham, which we have at the top of the list? That would give our market an enormous boost.

Mr. Baldry: My hon. Friend the Member for Morecambe and Lunesdale (Sir M. Lennox-Boyd) wrote to me today making a similar point. I want to get more abattoirs on stream as soon as possible, but to do that I have to be able to bring on stream more cold storage capacity. I hope to do that in the next two or three weeks. There is a finite number of renderers, and more abattoirs without cold storage facilities would force the renderers to use their limited amount of transport to visit more abattoirs. That would be less efficient and lead to a smaller throughput.
I hope that all hon. Members appreciate that the scheme will be in place for some months and that we must get it right. It is important to proceed in good order. As we introduce more cold storage facilities, we can use more

abattoirs. There are some excellent facilities. My right hon. Friend the Member for Bridgwater (Mr. King) has an excellent abattoir in his constituency, and I hope to bring it on stream in the near future. Cold storage will enable us to store parts of beasts that do not need to be rendered immediately. I want to clear the backlog as speedily as possible.

Sir Mark Lennox-Boyd: My hon. Friend will appreciate that there are many interventions because this is a complicated scheme. He is to be congratulated because what he is trying to do is unprecedented. I should like to add to what my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) said. In the north-east, there are five slaughterers on the list of 21, and in the north-west there are two. I do not want to engage in beggar-my-neighbour tactics, but I think that my hon. Friend will agree that his reasoning, which I am sure is well thought out, should be explained either now or in the winding-up speech so that no one in the north-west feels that he is being disadvantaged. The figures need clarification, and I am sure that my hon. Friend can give it.

Mr. Baldry: I certainly do not intend any part of the country to become disadvantaged. As the scheme develops, in parts of the country where there is a need for greater slaughter capacity more speedily, we shall bring on more abattoirs. I want to ensure that the scheme gives confidence to consumers and retailers that only young beef is entering the UK market. I also want to ensure that farmers are confident that they will be paid speedily and that all hon. Members are confident that the scheme is running efficiently.

Mr. Ian Bruce: Will my hon. Friend give way?

Mr. Baldry: I shall make some more progress and then give way to my hon. Friend.
We sought amendments to the original regulations at the behest of farming interests to get a top-up premium for heifers and steers and a dead weight option. It was not until late on 26 April that it was possible to obtain final agreement to the various provisions of the scheme that had been requested on behalf of farmers. Our success in getting agreement for a top-up payment for steers and heifers and a dead weight option has been greatly appreciated by the industry. The following weekend, immediately after the Friday when we secured agreement to the dead weight option, officials in MAFF and the intervention board worked throughout the weekend to ensure that abattoirs and livestock marts that might tentatively have become collection centres had all the necessary information as speedily as possible. That was got to them on 30 April, and the first animals under the scheme were slaughtered on 3 May.
As some of my hon. Friends have said, this is an unprecedented scheme—the largest and most complicated slaughter programme that has ever been introduced in this country. After all the regulations had been agreed, a number of legitimate sectoral and industry concerns had to be met. It is important for everyone to recognise that every animal slaughtered under the scheme has to be rendered prior to disposal. It is not possible simply to


slaughter and store a whole carcase. Waste material amounting to 30 to 40 per cent. of every animal has to be immediately rendered.
The UK has a finite rendering capacity. Prior to 20 March, huge amounts of animals that are now having to be rendered would have gone into the human food chain. It is impossible simply to introduce further rendering capacity overnight. I cannot suddenly find that capacity: it would take several months. In addition to rendering for the 30-month cull scheme, renderers continue to have to render offal from animals under the age of 30 months for the retail industry. I do not think there is any dispute about the accuracy of the renderers' estimation. There was a suggestion earlier that, in some way, the renderers were holding people to ransom. That was an unworthy suggestion. Judging by the groups that I have met, there is no doubt that the maximum rendering capacity that is available for the scheme is some 18,000 animals a week in England and Wales, and approximately 25,000 a week throughout the United Kingdom. I hope that we shall reach the target of 18,000 animals this week and in subsequent weeks until we start to introduce cold storage. As I said in my letter to hon. Members, I hope to increase that capacity in the coming weeks.

Mr. Bruce: I intervene because I know that, every time I have been to see my hon. Friend about matters concerning my farmers, he has been extremely adept at finding a way through for them. Needless to say, South Dorset farmers are very concerned. They have had their dead weight scheme and a local abattoir has been designated—S. J. Norman and Sons at Bridport. Unfortunately, now that the abattoir is telling them that they can send in their cattle, they have been told that the renderers will not come and service them, so they cannot take their cattle in. I raise that point only because I know that my hon. Friend will have an instant answer. If he does not, I am perfectly happy to start up the barbecue in my garden. If no one wants to come and eat, it will of course get burnt, but if they do, we will give it away.

Mr. Baldry: I fully understand that. The abattoir at Bridport is excellent and, as I said, I hope to be able to bring it into the scheme in the very near future. What happened was that the abattoirs, the renderers and the trade associations representing the abattoirs and renderers had discussions to seek to ensure that the maximum rendering capacity would be used now and in the foreseeable future.
Renderers have only finite transport facilities; there is a huge logistical issue. It made much more sense if a limited number of renderers were connected to the finite number of abattoirs in the first instance, and that is what has happened. I sent out details of that to hon. Members, in letters which I hope they received today. As I have told the House—I keep on about it because I think that it is fair that everyone should understand it—I am very keen to bring on extra abattoir capacity, including Bridport, just as soon as humanly possible, and just as soon as I can get cold storage facilities, which I reckon will be in the next two or three weeks.
I believe that it is very important that we increase the kill rate under the scheme as quickly as possible so that we can clear the backlog and farmers can be paid.

Mr. Cynog Dafis: I draw the Minister's attention to the situation in

south-west Wales—the county of Dyfed—where we have a very large dairy herd with many cull cows waiting to be processed. Two abattoirs have been designated for this purpose—Dewi James Cardigan and Oriel Jones Llanybydder—yet no animals have been processed through them. Can the Minister give me any good news about when he feels animals can begin to move from that very important region through those slaughterhouses?

Mr. Baldry: I had hoped that I had dealt with that point, but let me deal with it again. I have given directions that one of the abattoirs—ABP Shrewsbury, which is teamed up with the renderers at Widnes and is slaughtering five days, at 580 cattle a day, or 2,900 a week—should be dedicated to taking cattle from Wales. I made that clear in the letter that I sent every hon. Member on Friday. At Abergavenny, there will be five days' slaughtering, at 150 cattle a day, which is 750 a week. In addition, Welsh Country Foods, at Anglesea, is slaughtering cattle for north Wales. If we take the total of those three, it comes to 25 per cent. of the immediate kill in England and Wales for the next two or three weeks.
I am told that the Welsh herd makes up about 16.5 per cent. of the English and Welsh herd. I think and I hope, therefore, that colleagues in Wales will feel that, in the context of the initial stages of this programme, Wales is not being treated unfairly. As in the rest of the United Kingdom, I very much hope that it will be possible to bring on extra slaughter capacity in Wales in the very near future—in the next two to three weeks, and as soon as we can get more cold storage facilities.
None of us can increase that rendering capacity simply by wishing or willing it. The capacity is finite. It is important that everyone appreciates that. I think that everyone—farmers, those involved in the beef industry, hon. Members and our constituents—is anxious that the scheme should start to run at its maximum capacity as speedily as possible.
Given the limitations of the transport facilities immediately available to renderers, it was agreed that it was sensible to link up individual renderers with individual abattoirs to ensure maximum throughput to the renderers in the scheme. That has happened, and I hope that, this week, slaughtering and rendering will take place at the maximum capacity.
This is a new scheme, and I do not doubt that, on day one or two, there may well be one or two places where slaughtering does not take place as speedily as it might. A couple of abattoirs have told me that their throughput today was slower than it might have been because they had to do a large number of television interviews. As the scheme gets up and going, however, I hope that the maximum rendering capacity will be met.
I want to do more, of course, which is why I am recommissioning cold storage facilities, but they will take two to three weeks to be recommissioned and to come back on line. It must also be remembered that, even when we have further cold storage facilities, it is not possible just to slaughter and store. Part of every animal that is slaughtered has to be rendered, so I am working closely with the intervention board, abattoirs and renderers to sort out the logistical issues associated with bringing into the scheme a further large number of abattoirs, but ensuring that the animals are taken away as soon as possible after they are slaughtered and with the appropriate parts taken away to a scheme renderer.
I have circulated to every hon. Member in England and Wales a chart that demonstrates how I believe the throughput might look, with the processing in England and Wales reaching about 22,000 by the beginning of July. That will involve our storing a considerable volume of stock, which will have to be rendered at some time in the future.
I know that some concern has been expressed by some abattoirs that feel they have been struck off the list of approved abattoirs. I hope that I have made it clear to the House that that is not the case. Everyone recognises—I recognise—that it would be sensible to involve more abattoirs, but there is no point in more abattoirs becoming involved until we can, in the next two to three weeks, increase substantially the flexibility of the renderers by using cold storage facilities for a product that does not need to be rendered immediately. That will enable us to increase the throughput under the scheme substantially.
My best estimate, once we have cleared the backlog, is that the scheme will involve about 15,000 animals being processed a week, including cull cows and clean beef in England and Wales, although I anticipate that the impact of the 30-month scheme will change the husbandry of many beef producers. It is likely that, as farmers find that they can get a better price for any stock under 30 months, less clean beef will come into the scheme. I hope that the House will recognise that, in England and Wales—where weekly throughput needs to be 15,000, and 22,000 will be achieved in the not-too-distant future—it should be possible to clear the backlog in a reasonable time. I hope that it will be possible to go beyond 22,000. If it is, we shall certainly seek to do so.
It is clear that it will not be possible to cull every animal tomorrow or this week, and I know that farmers appreciate that fact. The NFU, the CLA and everyone else involved has indicated that they think it would be sensible, at the outset, to give priority to clean beef, although proper regard has to be had for casualty stock, of which I shall say a little more in a moment.
There had been requests for MAFF to work out some prioritisation scheme. I am sure that the House will appreciate that, once the backlog is cleared, the available rendering and slaughter capacity will be greater than the throughput needed under the scheme, so once the backlog is cleared, farmers should have no difficulty getting their cattle culled almost immediately, provided that they give the collection centres proper notice. We are considering a comparatively short-term issue of sorting out whose cattle will be slaughtered when the cattle in the immediate backlog are dealt with.
My instinct, and I suspect the instincts of a large number of hon. Members, is that any scheme of prioritisation devised by officials is, with the very best will in the world, likely to be more bureaucratic, more inflexible and to involve greater delays. When I asked the NFU what sort of system of prioritisation it would recommend, it said that it would have to have regard to the number of animals on the farm, the viability of the farm, the profitability of the farm and many other criteria.
I do not think that it takes much imagination to recognise that such an approach will be incredibly time consuming and that it will involve every farmer with substantial extra paperwork at a time when they could do

without any more intrusions into their businesses. Such paperwork would then have to be processed, decisions would have to be taken and farmers would have to be informed. It does not take long to recognise that it would be far better for livestock marts, abattoirs and farmers to work out together how to get the maximum sensible throughput. Although some forbearance on the part of a number of farmers will be required during the first few weeks, I am sure that co-operation at local level is far better than some centrally planned bureaucracy seeking to ascertain when every cow is killed at every abattoir.
Let me make it clear that I am chairing a committee that involves the chairmen, chief executives and equivalent of all the interests involved in the scheme—the NFU, the CLA, livestock marts, renderers, abattoir owners, vets, the retail industry and so on. At present, we meet daily, and we will continue to meet regularly. If there appear to be any problems in particular parts of the country, or if any particular abattoirs or other players in the scheme appear not to be complying with the spirit of the scheme, they will find me on their doorstep, wanting an explanation. Let me also make it clear that there are considerable controls throughout the process to ensure that there can be no scintilla of a risk that any meat from the 30-month cull scheme can ever re-enter the food chain.
The House will know that animals will have to be slaughtered on separate days and that the meat is immediately stained and taken away—which means that it is rendered immediately or stored prior to subsequent rendering. If there is any suggestion or suspicion that any collection centre and/or abattoir is not complying fully and strictly with the controls, I have made it clear that it will be suspended immediately.

Mr. Malcolm Bruce: Will the Minister consider a problem that was raised with me today? He keeps talking about the rendering problem and the need to deal with 21,000 animals but, as so many animals will be kept longer on the farm, they will be of above average weight. The Minister should therefore be thinking in terms of tonnes for processing rather than the number of beasts. He is likely to find that the situation is worse than he is describing.

Mr. Baldry: There is no doubt that, in the first few weeks of the scheme, we shall be taking a large number of heifers and steers, or clean beef. There is no mystery, and I do not think that anyone involved in the scheme failed to recognise that fact. It is for that reason that the NFU, the CLA and everyone else involved indicated that they hoped that collection centres and livestock marts, and abattoirs in their slaughter programmes, would give priority in the early stages to clean beef.
I was asked what was being done about animals in need of special emergency slaughter. I take very seriously the need to maintain animal welfare and consumer confidence. Animal welfare is very important. As I said, I have made it clear to all abattoirs in the scheme that they must take a commonsense approach to dealing with animals in need of special emergency slaughter, or slaughter that would take place on the farm. If I find that any abattoir is not participating in the scheme on that basis, it will be suspended from the scheme.
In addition, it also seems sensible to commission a network of incinerators across the country to deal with casualty animals, those which need special emergency


slaughter and those which have been killed on the farm. I shall ensure that, tomorrow, all the regional veterinary officers have a list of 10 incinerators which we estimate are capable of taking casualty fallen animals in that way.
Some people may ask why we are not using the incinerators to deal with more of the cull at the outset. The answer is simply that the incineration capacity is finite, but it will help to deal with casualty animals. Another question, which I have considered with the NFU, the CLA and other interested bodies, is why we do not use small specialist abattoirs to deal just with casualty stock. The answer is that it is important to have efficient and effective controls under the scheme. None of us wants there to be any suggestion that the wrong meat is going back into the food chain. The scheme has to be policed rigorously.
Everyone I met agreed that the best way forward was to ensure that the abattoirs, of which an increasing number will be involved in the scheme, are prepared to take casualty stock and that, in addition, the animals that cannot be taken to abattoirs, but which have to be killed on the farm, can be taken to an incinerator which is designated as a collection point and able to pay the farmers involved. This scheme is regarded by all those involved as the best that could be devised in the circumstances.

Mr. Elliot Morley: Will the Minister clarify the compensation arrangements for animals that die or are killed on the farm? Will the compensation arrangements be the same? We would not want injured animals being dragged alive to collection centres in order to meet the compensation criteria.

Mr. Baldry: I had hoped that I had made that clear. The compensation arrangements will be exactly the same, which is why I shall be designating incinerators as collection centres. Incinerators will be paid, and we estimate that it is perfectly possible, to within exactly the same tolerances as might be found at livestock marts, to weigh the lorries. I am sure that the scheme will have the full co-operation of the veterinary profession which, like my hon. Friend the Member for Teignbridge (Mr. Nicholls) and others, expressed understandable concern. I met representatives of the profession today and they believe that the scheme can work.

Mr. Roger Gale: My hon. Friend has concentrated mainly on the needs of the farming community, which I quite understand, but he and I know that we are dealing with tens of thousands of live animals. As a result of the illegal actions of the European Union and the hysterical response of some major traders such as McDonald's, we are facing what my hon. Friend has described as the largest slaughter programme this country has ever known. What specific measures will be implemented throughout this enormous but wholly unnecessary slaughter to ensure that the welfare of the animals is not disregarded?

Mr. Baldry: As I said, the welfare of the animals is paramount. The same very strict safeguards apply in this process as elsewhere. The slaughter of every animal will take place in licensed, designated abattoirs in the presence of the state veterinary service, which has the highest professional standards. The service is committed to maintaining the highest standards of animal welfare in the country, and—

Dame Elaine Kellett-Bowman: The world.

Mr. Baldry: Indeed, in the world. If I find a scintilla of a suggestion that any abattoir is failing to meet animal welfare standards, or any other standards, it will be suspended from the scheme.
I shall conclude by making two detailed points so that I am confident that I have replied to every criticism that has been made. The first relates to exemption for specialist herds. We are working on that. The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food, my hon. Friend the Member for Tiverton (Mrs. Browning), issued a consultation paper on specialist herds on 3 May. It was issued after she had had extensive meetings with farmers and others involved in the industry to ensure that it commanded their support. After the consultation period, we shall negotiate with Community colleagues to ensure that there are exemptions for that beef of more than 30 months.
We must not forget, however, that the genesis of the scheme rests not with us or with Brussels, but with market forces, retailers and others saying that, in the light of the Spongiform Encephalopathy Advisory Committee's recommendations, they no longer felt confident about taking meat from animals of more than 30 months. However, we hope that the exemption scheme will succeed in protecting Dexter cattle and others.
Secondly, the calf processing aid scheme is a Community scheme which has never been used before. It is being taken off the shelf, never having been practised before. It is important that we have got it up and running, but changes need to be made to it. We shall have to negotiate those changes with Community colleagues. For example, it seems sensible to try to increase the 10-day limit to a 21-day limit.
I am grateful for the opportunity to explain what the Government have been doing. I very much hope that, having heard my explanation of the way in which we are approaching various policy issues, the House will feel confident that the scheme is being taken forward with all due diligence and speed. We are always conscious of the many farmers who wish to receive compensation as speedily as possible, and I am determined that they shall do so.

Mr. David Harris: I am genuinely grateful to the hon. Member for North Cornwall (Mr. Tyler) for introducing the debate. Undoubtedly, as he said, and as I am sure all my hon. Friends who speak in the debate will agree, very real hardship is being inflicted on the farming community. Like every other hon. Member who has the privilege to represent a farming community constituency, I have received many representations and letters from desperately worried farmers.
I am also genuinely grateful to my hon. Friend the Minister for dealing fully and at great length with the points of criticism. If I have a criticism of my hon. Friend the Member for North Cornwall—I should like to call him that—in this debate, it is that he gave the impression, or was in danger of doing so, that, somehow, matters could be dealt with swiftly, easily and without difficulty. Indeed, the impression was that all the means of solving the problem were in the hands of my hon. Friend the Minister. Oh, that that were the case. It was not.
The hon. Member for North Cornwall was so right to stress that the scheme was at the behest particularly of the National Farmers Union, as my hon. Friend the Minister


stated very clearly in his letter. We all knew at the outset of the operation that there would be horrendous complications. Wherever one looked, one could see yet more ramifications of and difficulties arising from the process. Of course, not all the problems could have been foreseen. Some of them were foreseen—we knew at the outset that there would be problems with disposal.
I suppose that most hon. Members—I certainly speak for myself—had no idea of the state of the rendering industry. Frankly, one has always taken it for granted. It just happened that not many of us in the House were experts on the rendering industry. Clearly, as my hon. Friend the Minister rightly stressed, the difficulty and cause of frustration in the past few weeks has been the limitations on the rendering industry and the way in which it has chosen to go about handling the situation.
I pay tribute to the NFU, which has been in the front line of the crisis in handling all the calls from individual farmers. Like other hon. Members who represent constituencies in the south-west, I have received a briefing paper from the NFU in the south-west. It says unfairly that the Government
must take charge of the situation",
as if my hon. Friend the Minister had absolute powers. It calls on my hon. Friend to
Ensure that every farmer has an equal opportunity of submitting animals to the scheme; and
Ensure that priority is given to clean beef and infirm cows.
It says:
The Government must either take responsibilities themselves or appoint an outside body to allocate animals from farms to the abattoir/auctioneers and from the abattoirs to the renderers".
I am sure that my hon. Friend just does not have those powers. I suspect that those powers would be available only in time of war, and I doubt even then.

Mr. Nicholas Winterton: Does my hon. Friend accept that—I have received this information only in the past 24 hours—there is a bit of a cartel forming between the big abattoirs and the renderers? The big abattoirs are saying to the renderers that if the renderers take cattle from any other abattoir, they will not do business with the renderer again when the scheme is over.

Mr. Harris: Being a man of diplomacy, I might not put that quite as bluntly as my hon. Friend, but I have heard that suggestion. I have also heard another worrying suggestion, on which my hon. Friend the Minister might comment. An auctioneer in my constituency told me at the weekend that people were being assured at market by representatives of certain firms, "Yes, we will ensure that your animals are taken. We can get rid of them; we can dispose of them, but you will have to pay over the odds because we have links with the renderers." If that is true, it is terrible.
I agree with my hon. Friend the Member for Macclesfield (Mr. Winterton)—indeed, I raised the point in the House on Tuesday—that because of the way in which the scheme operates, there is a danger, if we are not careful, that small and medium-sized abattoirs will be forced out of business altogether and slaughtering capacity will be concentrated in the hands of the large abattoirs—the big boys. That is to be guarded against.
If I can have the attention of the hon. Member for North Cornwall for a second, I think that he would agree that it is unfair to put all the blame, as some have tried to do, on the Government or my hon. Friend the Minister. Many of the difficulties are outside my hon. Friend's control.

Mr. Tyler: rose—

Mr. Harris: Before I give way, I must say that I could not help but notice that the hon. Member for Glanford and Scunthorpe (Mr. Morley) laughed at what I just said. I find it serious and absolutely disgraceful that not a single Back-Bench Labour Member has attended this debate.

Mr. Tyler: I am grateful for the hon. Gentleman's support for some of the points that I have made. Are not his constituents, as are mine, concerned that the Government appeared to be not in any way prepared? Of course we do not blame the Minister for everything, but we are entitled to expect that a responsible Government should have foreseen some of the difficulties, particularly in relation to the renderers. There was no contingency plan in place, even after the dress rehearsal of the problem in November. I am sure that he would agree—he put the question to the Minister last week—that we were given no indication that the problem had arisen until 50 days into the crisis.

Mr. Harris: The hon. Gentleman has a marvellous crystal ball into which he can look, which tells him all the difficulties. I repeat what I said earlier. I think that it was very difficult to foresee all the difficulties. Perhaps one could have foreseen some. My hon. Friend the Minister responded to my pleas to have, for example, Helston in Penzance added to the list of markets, and I was delighted about that. Then, as the hon. Member for North Cornwall fairly acknowledged, the renderers said that they would deal only with certain abattoirs. I want Madron Meat added to the list of abattoirs. I doubt whether my hon. Friend the Minister has the powers to take control in the way in which some people seem to suggest he should. So many of the matters are outside his control, which is at the root of much of the problem.
I return to the effect that the crisis is having on all the constituents of those of us who represent farming communities, especially farmers who are virtually dependent on beef production. Others are probably being cushioned. We know that lamb and pork prices in the market have increased. Indeed, the deal for dairy farmers is pretty good because they can probably keep a cow a little longer than otherwise would have been the case.
The crux of the problem is beef producers who have to feed their animals. So many farmers have told me that they will be using up silage to feed the animals because, even though they are out to grass, the grass is coming on slowly due to the dry weather. Those farmers will be dependent on compensation, which is why it is absolutely essential that the backlog is dealt with and the cheques are sent out.

Mr. Malcolm Bruce: The hon. Gentleman is making a very important point about the problem and the cost of feeding. Does he agree that it would be helpful—some farmers have made such representation—if we could get agreement from the European Commission for earlier


access to set-aside grazing than September, especially since we have had such a long winter and the grass has not grown?

Mr. Harris: I would support any move that lessens the impact on farmers—there is no doubt that they are in a serious situation. The Government are doing the right thing. Clearly, we must get the cold stores signed up as quickly as possible and we must try to deal with the backlog.
I am sure that the hon. Member for North Cornwall will not give credence to the widespread myth that this crisis came about because the Government lifted regulations. He knows that that is not true, but in his closing remarks he said that someone else had said it. It behoves all of us to be responsible in this situation. It is up to all of us to kick the Minister and to kick the Government to do more to resolve the serious crisis for agriculture and for the rural economy.
The Government have to do more to keep farmers informed of what is happening. I believe that frustration and anger have built up because farmers believe that they are not being kept in the picture about all the difficulties that have arisen. I hope that the debate will go some way to telling people the true position. The farming industry has been remarkably patient about this, but patience is running out—people are desperate, frustrated and angry. It is up to all of us not to inflame the situation and not to play party politics, but to do what we can to help.

Mr. Peter Atkinson: I join my hon. Friend the Member for St. Ives (Mr. Harris) in congratulating my hon. Friend the Minister of State, Ministry of Agriculture, Fisheries and Food. The debate has given my hon. Friend the Minister the opportunity to lay out the way that Government believe the scheme should work—and he did so skilfully and clearly. The contributions of Liberal Members showed how ignorant they are of the problems that the Government have had to face in setting up the scheme. If the hon. Member for North Cornwall (Mr. Tyler) will forgive me, his speech was half an hour of whines and complaints. He did not make one constructive comment nor did he offer a single proposal.

Mr. Tyler: If the hon. Gentleman has not been listening to precisely the same concerns over the last weekend and the past seven weeks, he is not fulfilling his duty to his constituents.

Mr. Atkinson: I have listened to my constituents at great length, as I represent one of the largest beef farming constituencies in the country. Tonight, we have heard half an hour of whines and complaints from the Liberal party, but not one positive suggestion as to how the scheme could be improved. As usual, when it comes to rural matters, Labour Members have been absent during the debate.

Mr. Morley: I have listened to a number of jibes against the Labour party in this regard. The hon. Gentleman will be aware that this is a Liberal Democrat Opposition day. There will be a two-day debate on this and related issues this week. There will be a major vote on Thursday night and the Labour party will be out in force. If the hon. Gentleman shares our concerns about this and other issues, he is more than welcome to join us in that vote on Thursday night.

Mr. Atkinson: I shall certainly be present for the debate, but I doubt that I will find myself in the same Lobby as the hon. Gentleman. The Labour party claims that it represents rural interests. I hope farmers get the Message as to the exact amount of interest Labour members are showing in this matter tonight. Mr. Deputy Speaker, you will note that many Government Members are present in the House—they were here at the beginning of the debate and they are still here. They have found the debate to be worth while and they have shown an interest in being here. No doubt, they will also be here on Wednesday and Thursday.

Mr. Marland: Does my hon. Friend agree with me that the role of the Labour party throughout the entire proceedings has been nothing but to stoke up concern and to throw fat on a small fire to cause as much confusion as possible in the country? In a perverse way, the Labour party is trying to attract attention to itself.

Mr. Atkinson: I agree with my hon. Friend—that is exactly how the Labour party operates. The hon. Member for North Cornwall tried to make villains of two groups.

Mr. Malcolm Bruce: The hon. Gentleman should make his speech.

Mr. Atkinson: Liberal Members wasted half an hour with their endless complaints. The hon. Member for North Cornwall sought to make villains of two groups: the renderers and the supermarkets. My hon. Friend the Member for St. Ives has explained the position of renderers—they are there, they have a limited capacity and they cannot conjure more rendering facilities out of the air. Does the hon. Member for North Cornwall want moth balled rendering factories? He said that the Government should have seen this coming. What was my hon. Friend the Minister supposed to do? Was he meant to construct rendering establishments around the country on the basis that they might be needed one day? That is stupid.
The supermarkets are not the villains in this situation either. They are there to serve beef to their customers. If they can sell beef—they are increasingly selling beef to their customers because they say that all their beef is less than 30 months old—that is sensible. The supermarkets are a vital segment of the industry. It is right that my hon. Friend the Minister takes full regard of their views when he sets up the scheme.
My hon. Friend the Minister was right in choosing an industry scheme rather than a scheme laid down by the Government. Those who are aware of the agriculture and meat industry in this country know that every farmer is unique, that every livestock auction mart is unique and that every abattoir is unique, and that they all have ideas as to how the scheme should work. It is right that my hon. Friend sits down with them on a daily basis and gets them to set up the scheme and for the Government to put in the orders to make it work. I congratulate my hon. Friend on doing that.
I congratulate the National Farmers Union, which has been a great help, and the Country Landowners Association. I thank other organisations, such as the Meat and Livestock Commission, for their contributions. An unsung hero in the debate tonight is the intervention board. It has copped an awful lot of flak. It was trying to


put into the detailed scheme something that it had never attempted to do before. I appreciate that it must have had a difficult time setting up the scheme. The board deserves our thanks and the thanks of the farming industry for all that it has done.
I am grateful that my hon. Friend the Minister has added auction marts in my constituency to the list. In particular, I refer to Hexham mart, which is excellent. The important thing about livestock marts is that they are very much a friend and adviser to the farmer, particularly to hill farmers. A lot of farmers live isolated and lonely existences and they find it difficult to keep on top of issues and complications such as we have seen over the BSE issue. The mart is essential to help farmers in remote areas to understand the problems that they face.
Difficulties will arise, and I am sure that they will be drawn to the attention of my hon. Friend the Minister. For example, my hon. Friend the Member for Macclesfield (Mr. Winterton) mentioned abattoirs making threats to individuals. Another problem is the appearance of dealers emerging around the north of England. They say to farmers, "We will take your beasts off you at the live weight price." Apparently, they are reaching an agreement with the abattoirs to sell the beasts at the dead weight price and they are splitting the difference. I do not know whether these rumours are true. If they are true, my hon. Friend should investigate them.

Mr. Nicholas Winterton: My hon. Friend has mentioned the important role of cattle marts in this country, particularly in his constituency. Does he believe that there is a discrimination against cattle marts in respect of the live weight and dead weight criteria? Does he believe that some abattoirs are inviting farmers to deal directly with them rather than go through the collection points and cattle marts?

Mr. Atkinson: This is the market ruling, and I believe that in this case my hon. Friend the Minister is trying to achieve a balance between the interests of the livestock mart, of the abattoir and of the farmer. Abattoirs have traditionally and increasingly dealt directly with farmers, so it would be wrong to tell all those farmers that they must go via a livestock mart. However, those farmers with cull cows will obviously be encouraged to go through livestock marts and I suspect that many others will want to, because they will want the livestock mart to organise the transport of their cattle to the abattoir. Those with very few beasts will find it easier to deal with an auction mart—because the beasts can be collected into sensibly sized loads and taken to the abattoir on time—than to deal directly with the abattoir. The scheme will give the abattoir and the livestock mart something, and I hope that it will work.
It is early days yet, but my hon. Friend the Minister will need to start looking to the future. At the moment he has his head down, concentrating on today's problems, but, as we overcome those problems, new problems will arise. There is the prospect of a substantial fall in demand for beef throughout Europe. That will need to be tackled, because otherwise there will be surplus capacity of beef in Europe in the next few years.
Interestingly, the British have been almost the most robust about the beef issue. Our beef consumption fell initially to 60 per cent., but it is now back to 80 to

85 per cent. The Germans, whom some of my hon. Friends like to demonise in this regard, have suffered extremely badly in the sense that, after the first scare of BSE, only 30 per cent. of German beef eaters were still eating beef, and the percentage has only just crawled up to 50 per cent. The Danes, however, are also robust, and scarcely gave up eating any beef throughout the crisis.
Throughout Europe, beef production is scheduled to increase in the next few years, and if beef consumption fell by 20 per cent. and did not recover because of BSE—I fear it is on the cards—we are likely to produce a surplus of about 2 million tonnes of beef in the next few years, which will have to be dealt with by Europe.
Once the immediate crisis is under control, British farmers must carefully consider the future of the beef industry—and, dare I say it, the dairy industry, which will be the next problem on my hon. Friend's agenda.

Mr. Richard Alexander: I pay a warm tribute to my right hon. and learned Friend the Minister of Agriculture, Fisheries and Food and his team. Since this crisis hit the country about seven weeks ago, they have worked tirelessly, night and day, to try to resolve the problem in Europe and in this country. No one could have worked harder.
I wish to place that on the record. I do so especially because, during my few remarks, I shall suggest that one or two things might have been done better. My hon. Friend the Minister of State has gone a long way toward resolving the uncertainty, difficulties and anxieties that our constituents have felt and that we, representing them, have felt for them.
We must accept that, as has been said, we cannot find rendering capacity if it is not there. Yet there has been deep uncertainty in the farming community about how the cattle disposal scheme will work for farmers as individuals.
The crisis has been with us for seven weeks. I had a meeting with senior representatives of the farming industry in my constituency on Friday, and they were still uncertain about how the cattle disposal scheme would work out for them in our county. The letter sent on Friday by my hon. Friend the Minister to them and to us should help, but it would be wrong if we gave the impression that the problems were over and farmers need have no further worries.
From the outset of the proposals, it has been the National Farmers Union's position, which I tend to share, that a better administrative framework or organisation is needed. Farmers need somewhere from which to obtain information and advice. Without accepting the point made by the hon. Member for North Cornwall (Mr. Tyler) about the 15-year-old child at the end of the telephone—

Mr. Beith: I made the point.

Mr. Alexander: I am sorry. Without accepting that point, made by the right hon. Member for Berwick-uponTweed (Mr. Beith), I do say that the fact that it happened, although it may not be typical of what is happening throughout the country, shows that the system has not worked as well as it might have done, had someone taken on the organisation of the whole scheme. Farmers tell me that there is no one whom they can go to or ring up with reliability to find out what their position is.
I make that suggestion to my hon. Friend the Minister. He said that he did not want a dirigiste scheme, but something better needed to be done in the past few days.
We should shed a tear for some of the abattoirs that learnt last week that they would no longer be among those listed to be involved in the culling scheme. Two owners of abattoirs visited me on Friday. They had filled in all the forms; they had been inspected. They were told, as of last Friday, that they would be slaughtering 900 cattle a week.
I should say, in parentheses, that one of the problems that farmers in north Nottinghamshire have had—and especially the two abattoir owners, who are also farmers—has been that the letter that my right hon. and learned Friend the Minister of Agriculture, Fisheries and Food told the House on 1 May was being sent to all farmers did not reach them until Friday 10 May. That was the same day on which those two abattoir owners learnt by fax from one of their suppliers that they would no longer be in the scheme. They had had 10 days of uncertainty, and as soon as they received the information, they were told, by an outside source, that they were no longer on the list. I express concern on their behalf at how that happened.
I also express concern at the fact that the list has been reduced to 21. Every abattoir in Nottinghamshire, Derbyshire and Lincolnshire has been removed from the list. There never was one in Leicestershire. There is no abattoir in the entire east midlands—nothing from Harrogate to Shrewsbury.

Mr. Baldry: This is important language. It is not a question of anyone being removed from the list. Those abattoirs are still designated collection centres, and I have no doubt that, in the very near future, they will be slaughtering under the scheme. As I hope I have explained to the House, to maximise the slaughtering and rendering capacity, it has been possible to use only 21 slaughterhouses at present, but the number will be increased, and I have no doubt that the abattoirs that my hon. Friend mentions will be involved in the scheme as it develops in the next two or three weeks.

Mr. Alexander: That will be very reassuring; I am grateful to my hon. Friend. However, distances are a problem to the people in north Nottinghamshire and the east midlands.
There are other unacceptable consequences of the list being shortened. First, farmers now have to transport their beast much further, at their own expense, than, until Friday, they had believed that they would have to. Secondly, the beast must endure significantly longer journeys, and no farmer or welfarist likes to think that that is being done unnecessarily.
There seems to have been no strategic geographic consideration of where the chosen abattoirs are to be. The entire east midlands does not have one, yet elsewhere there are clusters of several within an approximately 50-mile radius. I urge my hon. Friend the Minister to consider more closely, if he can, where the abattoirs that have been chosen are situated.

Mr. Nicholas Winterton: I support my hon. Friend in his remarks. The very large abattoir at Crewe has failed to make the appropriate arrangements with the Ministry

of Agriculture, Fisheries and Food. It offered to slaughter:200 cattle a day and its employees were prepared to work seven days a week. The Ministry reduced the number initially to 100 and then to 50, at which stage it was pointless for the abattoir to become involved as it was doing that sort of business already with casualty cattle. My hon. Friend makes a very good point: it is important that those abattoirs come on stream if the scheme is to go ahead as quickly as possible.

Mr. Alexander: I shall comment on the way in which the situation has changed unacceptably for farmers, abattoirs and others who received other information initially. My hon. Friend makes a valid point.
I return to a point with which my hon. Friend the Minister of State dealt, but about which I remain uncertain. The system is unfair to producers who have always sold their stock live weight. Producers cannot support the live weight system. For example, a Charollais steer at 650 kg live weight is worth £718.90 and the same steer is worth £862.68 dead weight. That £143.78 shortfall is grossly unfair to the producer and to the auctioneer, who may be having a difficult time, with considerably reduced throughput and much reduced margins of profitability.
The slaughter scheme should not force live weight producers into the hands of the dead weight sector. Live weight markets provide an excellent service, with guaranteed payments on the day of sale. The slaughter sector is not as reliable, with eight or more abattoirs going bankrupt in recent years, owing millions of pounds to producers and to auctioneers. The auctioneers tell me that they do not want to be in the driving seat, but they want a fair system: their clients and their farmer customers should have a real choice in these difficult times. Without that choice, many more markets will shut, causing a dead weight monopoly in many areas. I am sure that no one wants that. Markets are the life-blood of many rural communities; people come to the towns to attend the markets. The market in Newark has the second largest livestock cattle throughput in the country—I make that point to my hon. Friend, because he told us about the cattle market in Banbury. I urge the Government to re-examine the unfairness of the present proposals regarding live weight and dead weight compensation rates, and I urge the Minister to make a change.
The system has changed for the farmer and for the producer in recent weeks, as instanced by the National Farmers Union in its briefing. Initially, the 25p per kilogram live weight top-up was to be paid for the first four weeks of the scheme. That is fair enough—if it had begun. Then it was to be paid during May, but it changed again and was to be paid until 10 June. The top-up will now be paid on all steers and heifers on farms aged more than 30 months as at 20 March. There may be grounds for making those changes, but they have caused great uncertainty within communities that have already suffered badly.
I shall not speak for too long as my colleagues want to contribute to the debate. However, I must refer to another issue in the NFU brief: the financial consequences for farmers. The delays in getting the scheme off the ground—that is what we are debating tonight: not whether Europe is at fault or whether my right hon. and learned Friend could have done things differently—have cost the farmers dear in feeding their animals and servicing their


bank loans. Some farmers who deal only in beef have received no income for the past seven weeks. I have referred in the House to a farmer constituent who has a throughput of 5,000 beef cattle a year: he has not sold one animal in seven weeks. Unless the sequence begins to move, the delays will lengthen.
I hope that my hon. Friend the Minister of State's comments in the House today and in the letter that was sent to our farming constituents last week will lead to a reduction in the backlog. Some 300,000 animals are awaiting disposal, and that number increases by 12,000 per week. Added to that are the 12,000 cows that would usually be culled every week. They are logjammed as well. I do not blame anyone for that situation: I simply seek to illustrate the extent of the problem that our constituents and the country face.
In conclusion, on behalf of the farming community—particularly beef producers—I ask that any future plans and dates be firm and well thought out. They should not be abandoned arbitrarily in any circumstances. Someone must take the scheme by the scruff of the neck and administer it; someone must organise the co-ordinated withdrawal of cattle from the farms. Farmers are sensible people: many of them elect Conservative Members.

Mr. Nigel Evans: Very sensible.

Mr. Alexander: Yes, they are very sensible to do so. They must know where they stand. In responding to the debate this evening, my hon. Friend has done much to give them the reassurance that they seek.

Mr. A. J. Beith: There could have been no more cogent explanation than that by the hon. Member for Newark (Mr. Alexander) of the fact that there is concern, delay, difficulty and confusion arising from the administration of the scheme. That is precisely the motion that we have put before the House. It is nothing extreme—merely a statement that there is a great deal of concern and anxiety in the farming world, which has been hit so badly by the crisis, about the difficulties attendant on the scheme. The hon. Gentleman illustrated them in a practical and sensible way, and the Minister will need to take note of what he said.
The experience has been similar in my constituency. Two weeks ago, the impression was given that only Darlington and Carlisle would serve as mart centres for collection for the county of Northumberland. They are both a great distance from that county, which produces 8.5 per cent. of the national beef herd. That is not bad for one county. Representations have been made by a number of hon. Members, including the hon. Member for Hexham (Mr. Atkinson), about the marts in our constituencies. I made representations about Acklington, Wooler and Belford and marts were then added to the list.
It was the beginning of a series of difficulties in a scheme for which farmers had already been waiting for some time. When the new marts were added, further confusion arose as to whether they could begin operation as collection centres before they had been registered through the state veterinary inspection scheme and given a registration number. Two of the marts in

my constituency—those at Wooler and Belford—were firmly of the impression that they could not begin operation until they had received a registration number. They and the local vets contacted the intervention board seeking clarification. On Friday, one of the marts found that the only person whom they could contact in the intervention board was a gallant 15-year-old trying to fill the breach—resembling the little Dutch boy putting his finger in the dyke—such was the chaos in the intervention board.
Today, my office spent the entire afternoon trying to get the intervention board to clear up the matter. Eventually, it became clear that registration was not required and the marts could start operating as collection centres immediately. However, somebody with authority should have made that clear to them and they should have obtained that information at the crucial stage. The fact that they were not able to do so further added to the delays and the problems.
We have also faced difficulties resulting from the reduction in supposedly available abattoir capacity, because the renderers are not prepared or able to service anything like the number of abattoirs that were supposed to be available.
The Minister of State said little tonight about the use of cold storage. We want clear assurances that there will be no delay in bringing that cold storage into use and in taking practical steps to ensure that the necessary rendering can take place of carcases that are left in cold storage for a period. Action must be taken and the process set in train without delay.
The hon. Members for Newark and for Macclesfield (Mr. Winterton), among others, referred to the concern and anxiety about live versus dead weight disposal. I quoted an example showing that the premium on a 700 kg clean beast could be about £200.
Hon. Members have quoted the National Farmers Union brief, but they have been anxious to quote one part of it, and not the rest. The NFU makes it clear that at the
Beef Management Committee meeting on 26 April … the Management Committee rejected the proposals made by the slaughterers and ourselves of using an accurate conversion coefficient for steers and heifers (0.6 as opposed to 0.5 for cows). Accordingly, the scheme encourages farmers to enter all their steers and heifers into the scheme at abattoirs instead of using their normal marketing channels.
That is potentially extremely disruptive, not so much to the large marts at Banbury, in the Minister's constituency, but to the smaller rural marts, which are a key feature of agricultural life in the beef-producing areas, as many of them operate at a much tighter margin than the very large marts to which reference has been made.
It also affects the hauliers profoundly if their regular business is conducted into and out of a particular mart. They may not get business from a farmer who takes his own animals directly to the abattoir. There are also animal welfare problems. If animals are not moved in reasonable quantities, as they would be from the mart to the abattoir, vehicles will be carrying relatively few animals. It is much more difficult to give animals a safe and comfortable journey if there are not many of them in the vehicle than if the vehicle is fully loaded, because there is movement of animals as the vehicle travels along.
What one would hope to achieve in getting the process right is that the normal balance of business between live weight and dead weight is not disrupted in such a way


that, when something like normal conditions return, we shall no longer have the facilities that are so important to the rural areas. Nobody is trying to push the balance between live and dead weight in one direction or the other, but the arrangements will do precisely that. It could be extremely damaging and detrimental to beef-producing areas. Hauliers are already going out of business. Marts could go out of business and they will not be replaced.
The NFU brief fully bears out the concerns that have been expressed. It continues:
The NFU is dismayed that a combination of delays in decision-making and an underestimate by the Government, in the face of repeated warnings from the NFU, of the practical difficulties involved in establishing fair arrangements for the collection, slaughter and disposal of tens of thousands of cattle a week has caused such a significant delay to the opening of the scheme.
It goes on to refer to the large and growing backlog of cattle on farms and the particular problems resulting from the fact that only 21 abattoirs are currently operating the scheme.
It will not do just to say that the crisis is unprecedented and nobody knows how to handle such schemes. In the old days, the Ministry of Agriculture, Fisheries and Food was well accustomed to handling crises of one variety or another. That went right through the war and the post-war years, but in those days the Ministry had an infrastructure of offices designed to administer fairly complex systems. MAFF coped in the past with foot-and-mouth disease and all sorts of other crises. The Ministry is no stranger to putting together arrangements in a hurry, to deal with a crisis that could cause severe damage to the farming industry. It is reasonable to assess performance, even in circumstances as difficult as the present circumstances.
There has been more delay and less information available than there ought to have been, and decisions that are likely to have a disruptive effect have been taken—all that, when the scheme is intended to help the farming industry out of a desperate situation. Ministers must take account of the representations made by hon. Members in all parts of the House tonight, to ensure that the running of the scheme is radically and rapidly improved, so that it brings genuine assistance to a difficult situation in the farming industry.

Mr. Paul Marland: Gloucestershire has a problem with debates such as this, in respect of the participation of hon. Members representing Gloucestershire constituencies. Two of my hon. Friends are ineligible to speak. I put this on record, for the interest of the local press. My hon. Friend the Member for Stroud (Mr. Knapman) is a Whip, so is unable to speak in these matters, and my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) is parliamentary private secretary to my right hon. and learned Friend the Minister, so is not allowed to speak in these matters either. However, I had a brief conversation with my two hon. Friends beforehand and—although they have not heard what I am going to say—they join with some of the remarks that I shall make. I am sorry that the hon. Member for North Cornwall (Mr. Tyler) is leaving the Chamber, because he was to feature in my remarks later.
I want to mention the Labour party's role in the matter, because it has been absolutely shocking. I said earlier in an intervention that there has been much fanning of the

flames, to create concern and anxiety among the citizens of this country. The hon. Member for Peckham (Ms Harman), for example, asked the Secretary of State for the Environment whether he acknowledged
that public confidence on this issue is hanging by a thread",
and to confirm
that SEAC members who are parents or grandparents are not giving beef to their children or grandchildren".—[Official Report, 20 March 1996; Vol. 274, c. 376–77.]
The hon. Lady had no idea whether or not SEAC members were doing so. That was simply a way of seeking to cause confusion and anxiety among people who had been perfectly happy eating beef beforehand.
There have been no speeches from the Labour Benches.

Mr. Morley: indicated dissent.

Mr. Marland: Not until now. Perhaps I have provoked Labour's Front-Bench spokesman to say a few words, but there have been no speeches or interruptions from Labour Members. That is a disgraceful performance.
I realise that I am walking on eggshells, but I believe that the press owe all of us something. The press are keen enough to write the bad news about the difficulties faced by the citizens of this country but when the Government are going diligently about their business, seeking to reassure the farmers of this country that something is being done to right a dreadful situation, where are the press? I do not know whether we are allowed to acknowledge the Press Gallery—I know that we are not allowed to acknowledge the Strangers Gallery. The Press Gallery is bereft of reporters.

Mr. Harris: On the day on which I had the honour to sponsor an exhibition Upstairs to mark the 128th anniversary of the coverage of the House by the Press Association, will my hon. Friend take it from me that the Press Association, as always, is represented in the Press Gallery?

Mr. Marland: I realised that I was walking on eggshells, but I did not expect my hon. Friend to put me down in the way that he has.
I was astonished that the hon. Member for North Cornwall had not read the National Farmers Union brief, but obviously the leader of the hon. Gentleman's party did so. On 26 March, the right hon. Gentleman said in Prime Minister's Question Time:
This morning, the National Farmers Union, which is presumably not hysterical, backed by the entire food industry, which is presumably not hysterical either, has called for older cows to be taken out of the human food chain."—[Official Report, 26 March 1996; Vol. 274, c. 832.]
So it is utter nonsense to suggest that the scheme was dreamt up by the Conservative Government. I am very sorry, therefore, that the hon. Gentleman came to the debate so ill prepared. What is more, the hon. and learned Member for Montgomery (Mr. Carlile) did not even know that there were no renderers in Wales. Is theirs a serious political party, or is it some kind of joke? We really do expect better.
Wrestling with BSE takes place in a changing scene. I congratulate Ministers on the actions that they have taken thus far in an extremely difficult situation. They have kept Members of Parliament well informed, and they


have had to respond quickly as matters have progressed from day to day. It does the Liberal Democrat party no good to quote a week-old article in Farmers Weekly. Things have changed a great deal in the past week.
I, too, have made telephone calls to Gloucester market and other interested parties in Gloucestershire. I have been assured by the market this afternoon that the business of gathering cattle is now going smoothly. The slaughterhouse in my constituency commenced slaughtering last week. Of course these operations take a while to get going, but when I spoke to the slaughterer today I was told that the work is going well. The slaughterhouse is experiencing little difficulty sorting out the wretched problem of removing these cows from the herd.
If delays have occurred, that is perfectly understandable; 70 per cent. of the funding for the scheme is coming from Europe, so obviously approaches had to be made to our European partners for their backing.
I also learned today that the supermarkets are not sure whether cattle that are to be rendered can be slaughtered on the same premises as cattle going into the food chain. Discussions on that are therefore taking place; they too will take time to sort out.
In Gloucestershire, clean beef is being given priority because there is a premium on it. My first constructive point for the Minister this evening is to ask whether there is a chance of extending the premium for clean beef over a longer period, so that other cattle can be slaughtered before the clean cattle. As hon. Members have pointed out, many cattle need to be taken out on welfare grounds.
I am delighted also that cold storage is to be used to speed up the slaughter. It is costing farmers thousands of pounds to feed these cattle and they want to get rid of them as quickly as possible. Another affected group, of course, are those who were carrying large stocks of beef before the crisis broke, when the Labour party did so much to scare everyone off eating meat. Many exporters have millions of pounds' worth of stock floating on the high seas and are wondering what to do about it. Will there be any compensation for them?
I am sorry that I do not have time to speak at length this evening, but I believe that we should start to take reprisals against Europe if nothing happens later this week. We should also lay down certain conditions for imports. All meat imported to this country must have specified offal removed, as happens here. All imported meat must be tested for drugs and other illegal substances. And all such meat must have been subjected to the same veterinary inspections at the place of slaughter as we conduct. Lastly, we cannot accept imported meat from animals fed on mammalian compound.
As I say, I am sorry not to be able to speak for longer, but as the Whip is telling me to sit down, I will.

Mr. Elliot Morley: The Labour party, and myself on occasions, have been accused of many things, but to be accused by the hon. Member for Hexham (Mr. Atkinson) of being responsible for the bovine spongiform encephalopathy crisis so that we could attract attention to ourselves is going a bit far. I can tell

the hon. Member and others that the Labour party, in 1989, called for ingredients to appear on feed bags; the Labour party, in 1989, called for a proper system of cattle registration so that cattle could be traced back to their holdings; and the Labour party queried the standards of feed renderers and raised the problems of cross-contamination, which—as we have now seen—has been happening for some years and, at least, since 1988 when the ban came in. We in the Labour party do not need anyone to lecture us about the role that we have played in rural areas. We have defended the interests of the farming community and the beef sector since the problem first started. As we know from surveys and opinion polls, the public clearly hold the Government responsible for the crisis. The Labour party does not feature at all in the list of people whom the public hold responsible for the problem, and nor should it.
As I pointed out to the hon. Member for St. Ives (Mr. Harris), who was not here earlier, there will be a two-day debate on the subject on Wednesday and Thursday. The Labour party will be out in force on that occasion. It is a great shame that the Government are not prepared to accept an amendment so that we could have a genuine debate and we could see from the vote who stands up for the farmers. On the issues of the common agricultural policy and BSE, there will be a vote and we will see who will stand up for the farmers by voting against the motion on Thursday. Hon. Members will have the opportunity to stand up for the farming community, and we will see what happens.
To say that the implementation of the scheme has been in some difficulties is an understatement. The implementation has been described in words such as "shambles" and even the kindest organisations have expressed their dismay about the way in which the scheme has been implemented. In the Labour party, we recognise that the scheme is huge and that there will be problems in implementation. We do not deny or underestimate that, but the Government must recognise the widespread concern about the operation of the scheme and the six weeks it has taken to introduce. Perhaps the Minister might be able to tell us whether any contingency plans were ever drawn up to deal with the problem, which we now face, of potential links, and the implications for human health, between BSE and Creutzfeldt-Jakob disease or whether everything has been put in place since the original statement six weeks ago.
The time scale is the key issue. I must disagree with some Conservative Members who said that the problems happened a week ago. That is not the case. Today's Eastern Daily Press quotes a farmer as saying:
There is no longer a single approved outlet to handle these cull cattle in Norfolk, Suffolk or Cambridgeshire".
That farmer, Mr. Brigham, who farms near Dereham, is also quoted, interestingly, as saying:
It really does not inspire confidence. It is no wonder that the rest of Europe is looking at this shambles and that our partners question our ability to handle the crisis".
I shall return to the issue of credibility, but those quotations demonstrate the problems in the east of the country.
There are also problems in other parts of the country. My hon. Friend the Member for Barrow and Furness (Mr. Hutton) has written to us today to express concern at what is happening in his part of the world.

Dame Elaine Kellett-Bowman: Where is he?

Mr. Morley: He was not able to come here tonight, so I am taking his point up. I hope that the hon. Lady is not trying to trivialise or make a point out of a very serious problem for farmers in Cumbria. My hon. Friend told us that his local slaughterhouse appeared to be on the approved list and it was told to take animals. However, on Saturday 11 May, it was told that the animals it had in store would be removed for rendering by arrangement with the intervention board. The slaughterhouse had come to an arrangement with a renderer in Lancaster and it was also told to continue the work until Tuesday 14 May, when the matter would be reviewed.
The problem is that there is now no collection centre for animals more than 30 months old in Cumbria, even though that slaughterhouse had a casualty animal licence. The collection centre in Ulverston is also concerned that animals collected will have to be transported considerable distances due to the lack of an abattoir in that area. Indeed, the number of slaughterhouses has been reduced because of what appears to be the influence of the rendering industry. The Government must tackle the issue. Concern has been expressed by the farming press, the National Farmers Union, the Country Landowners Association and the British Veterinary Association.
The BVA puts its finger on the issue in the title above its comments, which is "Practice versus Theory". It reports that confusion is rife, with farmers, hauliers, markets and abattoirs all complaining that they do not know what is supposed to be happening. It adds that reports of animals being transported incredibly long distances before slaughter, although anecdotal, must be taken seriously. Indeed, they must, given the problems that have not yet been successfully resolved.
The option of live weight and dead weight concerns many auctioneers. The Opposition believe that the option should be available to farmers. The issue rests with the calculation of compensation, and it is one to which the Government should return to re-examine it. Instead of saying that dead weight should not be an option, the problem of compensation, if there is one, should be reviewed.

Mr. Nicholas Winterton: Will the hon. Gentleman comment on the advice that the National Farmers Union has issued by fax today to all its members with fax machines? It has been issued also to cattle markets. The representatives of two cattle markets have expressed considerable sadness to me today that the NFU should encourage traditional farmers who go to a cattle market to take their cattle direct to an abattoir, thus cutting out the cattle market which, in many areas, is a vital part of the rural economy.

Mr. Morley: I accept the hon. Gentleman's genuine concerns. I think that he will accept, however, that many producers have always had a direct relationship with slaughterhouses. The dead weight option was rightly reintroduced by the Government, although at a late stage.

There were welfare implications for many animals. The dead weight option means that it is possible to get more animals straight to the slaughterhouses, thus reducing delay. I think that the hon. Member for Macclesfield (Mr. Winterton) is more concerned about compensation arrangements, which I am sure the Government could reconsider.
The Government should give some thought to beef animals that are generally not marketed until they are over 30 months of age. The Government have said that these animals are under consideration against the background of the European Union. Has any progress been made on exemptions, which would reduce the great pressure that now exists?
Can anything be done to increase rendering capacity? I understand that a business cannot suddenly switch on extra capacity. It will not be able to find the necessary capital, especially if demand will decline or is in decline. It has been made clear, however, that the scheme will run for a considerable time. Renderers, because of the gearing of the scheme, receive much financial advantage. Have the Government discussed with the renderers whether it would be possible to introduce extra capacity within their businesses?
There could be a problem with incineration capacity in dealing with rendered products. Does that mean that some rendered products will go into landfill sites? Is the Minister able to give a categorical assurance that all rendered products will be incinerated?
Beef has been exported and, because of the worldwide ban, it will have to be imported back into the United Kingdom. I do not know whether the Minister knows—I am sure that she has had representations from beef exporters—that South Africa currently has 27,000 tonnes of British beef. That 27,000 tonnes will have to be brought back to the United Kingdom, at the insistence of the South African Government, because of storage problems. How will all that beef—and, indeed, other consignments that are coming back from abroad—be disposed of? Will it be rendered, incinerated or put on the market? The Minister must be aware that some of it will be from animals aged over 30 months, and that putting it on the market would cause difficulties: it would be in breach of the Minister's own rule.
The hon. Lady shakes her head, but I should like clarification of how that beef will be dealt with. It is a real problem for the sector of the beef industry that we are discussing. I appreciate that the problem is caused by a worldwide ban, and I am keen for beef exporters to receive some support. British beef exporters deserve all the support that they can get, and the sector will receive no compensation from the package.
Will the Minister also give some consideration to bull beef producers, whose animals tend to be ready for market at 24 months? It is almost exclusively an export market, and is particularly important in Scotland and parts of Northern Ireland. Will the Minister consider including that category in the 30-month compensation scheme, at the very least until the export ban is lifted? Because there is no market for such beef in the United Kingdom, the producers are likely simply to retain the cattle until they


reach the age of 30 months and then put them into the 30-month scheme; but they will have to find six months' worth of feed, which they would not have to find in normal circumstances.
It is a pity that some of the suggestions that we made some years ago, which I mentioned in my introductory remarks, were not accepted at the time. I know that action is now being taken, and I believe that the Government are trying to rectify the position by introducing measures to help the consumer and restore consumer confidence, but I must disagree with the hon. Member for St. Ives—who generally speaks thoughtfully about issues such as this—on the question of the Government's responsibility.
The Government introduced the scheme, and they are responsible for it. We have heard tonight that some of the problems are being caused by the rendering sector, but surely the Minister and the Government must have some influence on the operation of that sector, which is insisting on working with only 21 slaughterhouses. Ultimately, they control the purse strings. Ministers cannot escape their responsibility; I suspect that the hon. Member for St. Ives would not disagree with that.
Mr. Brigham said that it would be difficult to persuade the European Union to lift the ban if it appeared that the Government could not implement their own scheme. The Labour party, certainly, feels that credibility is involved here. The Government's credibility has been severely damaged, and it is important to the beef sector—and, indeed, to our economy and exports—for it to be restored as quickly as possible. I hope that Ministers will take account of what has been said today, and ensure that it is acted on—that compensation is paid to farmers as soon as possible, that the problems of delay are resolved as soon as possible and that more capacity is provided as soon as possible, particularly cold-store capacity. That would restore the Government's credibility, and would certainly restore faith in the British beef industry.

Mr. Malcolm Bruce: We have had an extremely good debate. The hon. Member for Glanford and Scunthorpe (Mr. Morley) should recognise that we are discussing a substantive motion with a substantive amendment, and that a substantive vote can take place at the end of the debate.
The Minister of State, who spoke for 51 minutes, made a good fist of a difficult situation. He gave many detailed answers and explained a number of issues in response to questions from hon. Members on both sides of the House. I commend him for that, but he must still accept that outstanding concerns, some of which were expressed by Conservative Members, remain. The hon. Member for Hexham (Mr. Atkinson) wasted a certain amount of his speech with gratuitous attacks, but identified one or two important problems.
In replying to the debate, will the Parliamentary Secretary, to the Ministry of Agriculture, Fisheries and Food answer the question that one or two people have raised about whether supermarkets are discriminating against abattoirs? Numerous abattoirs do not wish to be included in the scheme for fear of being tainted with the idea that they are not acceptable for prime beef slaughtering. If that is the case, it is important that we know that it is the case and that the Government take a grip on the position.
The hon. Member for St. Ives (Mr. Harris) raised a number of points. He stressed in particular the difficulties that farmers are facing with the high cost of additional feed and the delay in waiting to get their cattle to market, which, for some of them, could be considerably longer yet. In an intervention on the hon. Gentleman—again, I would appreciate it if the Minister dealt with this—I asked whether representations could be made to allow, on a one-off only basis, early access to set-aside land in mid-July instead of in September to take account of the fact not only that we have a problem, but that we have it after a long winter, when there was even less grass than usual for the time of year.
The hon. Member for Newark (Mr. Alexander) was his usual frank and disarming self in dealing with the position in an honest way. He identified the concern about the delay, the continuing shortage of abattoirs in his constituency and the problem of the lack of rendering capacity or of some other means of enabling the process to continue.
The hon. Member for West Gloucestershire (Mr. Marland) again could not resist a few gratuitous attacks, but his comment about the 30-month rule missed the point and his comments quoting my right hon. Friend the Member for Yeovil (Mr. Ashdown) did not prove the hon. Gentleman's point. It does not matter, because we are stuck with the position, but the Minister of Agriculture, Fisheries and Food was suggesting one weekend that the entire British cattle herd might have to be slaughtered. Faced with that or a cull of 30-month-old cattle, which would you choose, Mr. Deputy Speaker? There was also a recognition—numerous people told my colleagues and me this when we visited Brussels—that, if urgent action had been taken at the beginning to put a scheme in place, progress towards a lifting of the ban might already have been made.
The hon. Member for Glanford and Scunthorpe made the only speech from the Labour Benches. It was odd that he had to refer to a letter from one of his hon. Friends when there was plenty of opportunity for a Labour Back-Bench Member to make a speech, but, throughout the debate, not one Labour Back-Bench Member was present. That reflects the arrogance of the Labour party, which is interested in who is moving the motion rather than the substantive issues that it deals with. I give credit to Conservative Members, who have made speeches on behalf of their constituents and whose questions were answered by the Minister. That seems to be the right and constructive response.
I was unable to attend a large part of my Scottish party's conference a few weeks ago in Aberdeen, a week after the ban was imposed, because I was accompanying the noble Lord Lindsay, the Under-Secretary of State for Scotland with responsibility for agriculture, in my constituency in Aberdeenshire. We were seeing for ourselves the scale of the problem. Both of us were shocked by what we saw and by its implications. We visited one farmer who said, "I have 120 head of cattle, which will be going to market in the next two weeks and for which I have already run out of feed. What is going to happen?" That farmer is still facing that problem and still feeding those cattle. No progress has been made towards resolving the problem.
The noble Lord Lindsay and I then visited Donald Russell, a meat company in my constituency. Literally 10 minutes before we arrived, it paid off its entire work force of 34 people because it had no market. That company has developed the top end of the British export market for prime Scottish beef. It had a £10 million turnover and 98 per cent. of its products—80 per cent. of which were beef—were exported. Now that company has no market and no business. It is desperate, and, so far, no measure has come near to giving it any chance of surviving and getting back into the market when the ban is lifted.
Any suggestion that the lifting of the ban is not the most urgent priority is simply unacceptable. We need to get measures agreed, in place and working so that we can persuade our partners to lift the ban as early as possible. That is what we must deliver and it is why people are so concerned about the delay.
I shall give the basic statistics for Scotland. Last year, £120 million-worth of Scottish beef was exported and the industry sustained 21,500 jobs. It is unacceptable, when 21 per cent. of Scotland's beef production is exported, to be told that, in the long run, the export ban might be lifted. It is vital that it is lifted at the earliest opportunity.
I had a letter from a farmer from outside my constituency who has specialised in the export of young bulls, especially to Italy. As he says, it was his choice to concentrate on that market, but now he has been excluded from it and from all compensation measures because he was selling cattle to the Italian market for slaughter at 12 months—a sector for which no assistance is given. He estimates that he will lose between £100,000 and £125,000 this year. There is no help in sight and that is a desperate plight for any farmer.
We must deal with the problem of BSE, and those who pretend that it has come from somewhere else should consider the basic facts. There have been more than 162,500 cases of BSE in the United Kingdom compared with 324 cases in the rest of the world.

Dame Elaine Kellett-Bowman: What about non-declaration?

Mr. Bruce: The Minister would not support the hon. Lady's contention. She cannot possibly claim that the difference is somehow due to non-declaration and she would be unwise to suggest that there have been no undeclared cases in the United Kingdom. We all know the reality. In the context of Britain and Germany, there may have been some undeclared cases, but there have been 162,500 cases in the United Kingdom and four in Germany. It is not surprising, after a 55 per cent. drop in the home market for German beef, a 40 per cent. drop in France and a 30 per cent. drop in Italy, that there is some concern in those countries. If hon. Members represented constituencies in those countries, they would certainly be calling for action to protect their farmers.
We must deal with the problem and we must persuade people that our measures will lead to the ultimate eradication of BSE in the beef herd. That is the way to get back our own confidence and international confidence and to return to the market with what has been recognised as the best quality beef that people can buy. We can produce it, but we must eradicate this problem, and anybody who diverts his attention from that is not helping British agriculture or British beef production.
I am surprised that, throughout the debate, no hon. Member mentioned the additional, selective slaughter programme. There is no doubt that that must be agreed also if we are to get a final agreement package. Perhaps it might have been better if that had been agreed before we embarked on the major 30-month slaughter programme which is creating such enormous capacity problems. However, we need to get that in place.
A couple of weeks ago, my hon. Friends and I visited the Commission in Brussels to try to establish its view of the situation. The opening position was quite clear: we want to get this ban lifted as early as possible; but for that to be done, we have to have clear proposals on the table that we can recommend to the Council of Ministers; and we have not had them. That was two weeks ago.
On the morning we arrived, the officials received what was described as a "non-paper" from the British Government, with a few "suggestions and ideas". That turned out to be the document that was presented at the Council of Ministers and almost immediately rejected as an apparent British offer on selective culling. When I subsequently saw the document, it did not convince me that it presented a detailed, realistic and thought-through policy. In those circumstances, it is difficult to see how it would have convinced our partners.
I can confirm that the Commission officials to whom we spoke said that they believed that it would be possible to agree a slaughter policy that was effectively targeting the most at-risk cattle, and that the numbers would not be dramatically different from those that we were talking about. An agreement could be struck. We desperately need that agreement to get the ban lifted. I should be grateful if the Minister could tell us in her reply what stage we are at with that agreed policy.
The prime concern in this debate, which has been mentioned in the speeches of hon. Members from both sides of the House, is the situation relating to the 30-month cull and the removal of the older cattle from the food chain. The simple nub of the problem has clearly been acknowledged: blockage and obstruction in the rendering capacity is causing the main problem. Today, I spoke to my contacts in the Scottish industry, and they said that they could slaughter the required amount, but they cannot get them in for rendering.
One small mart in my constituency, Huntley mart, was hoping to get 150 cattle away tomorrow for slaughter, but it has had to cut back that number to 60 and is not sure whether it can manage even those. The right hon. Member for Dumfries (Sir H. Monro) said that we are making progress in Scotland. We are, but it is still a long way short of getting rid of the backlog.
It was pointed out to me that the capacity that was being considered was such that we were still not even building up to a slaughter rate that would achieve a net reduction in the backlog on farms, and that capacity would continue to build up for several weeks before we started to make any real reduction or inroads.
I intervened on the Minister's speech to make a specific point, which I do not think he fully appreciated—I do not blame him for that. The point, which was made to me, is that, because cattle have been kept and fed on farms for extra weeks and months, they have put on extra fat. It is therefore more appropriate to talk not about how many beasts can be processed through the rendering but about the tonnage. The problem is that the Minister may be


miscalculating on those figures to his disadvantage. I say that as a constructive issue that must be dealt with so that we can find the capacity.
If we cannot conduct the rendering process, it seems to be clear that we shall need to increase incineration capacity and storage capacity. Until we can get up to a full slaughtering level that is clearly reducing the backlog on farms, we shall satisfy neither our home producers nor those in Europe who need to be persuaded that we have this issue under control. I think that that is fundamentally why there is so much concern in the country.
The Minister made it clear that his view was that this is a very difficult situation, that it is much more complicated than anything that Ministries have had to deal with before and that we really should understand that he is working extraordinarily well with his officials to get this far. I am sure that the situation is difficult—I am not suggesting that it is not nor belittling it. It is very difficult being a farmer out there, or a meat producer who is trying to sell processed meat without any cash flow, outlook or movement in the market. Most people are saying that seven weeks is too long.
How much longer before we can see a real shift in the market? Effectively, farmers are being told that they have to put their cattle in a raffle. If they are lucky and their number comes up in it, the cattle be designated to go to slaughter. Some of them are now being told that their raffle will not be drawn for six and a half weeks from today. They will not even enter the raffle for another six and a half weeks because all the allocated space has already been taken up by what went in in the first week.
The Minister must understand that farmers are saying such things. When market managers and abattoir managers are having to cope with such comments, it is no wonder that people feel extremely stressed and distressed and inevitably see that there is a need for firm action.
It was interesting that one or two Conservative Members said that what was needed was someone to take control of the situation. It was not quite clear what they had in mind but, to judge from the Conservatives' record, I suppose that it would be a firm of management consultants or something similar. Ultimately, however, the Government must take control—they are in the hot seat. If they need to bring in extra help from outside they should do so, from whatever source is necessary.
It is not unreasonable for farmers, meat producers, abattoir owners, haulage contractors and everyone in the beef trade to say that, whether or not it is the Government's fault, they ultimately require the Government to deliver the goods that will get them out of this mess. People in the industry want the scheme to be working so that they can see the backlog being reduced, and they want it agreed with our European colleagues that what we are doing is enough to persuade them that the ban should be lifted at the earliest opportunity. That being the case, I draw the Minister's attention to two comments.
First, the Minister of State mentioned the Country Landowners Association, which has given the Government credit for measures that have been put in place but still expresses frustration about the situation. In particular, it says:
The CLA has supported the Government in seeking the removal of the EU ban but not at any price. The UK's effort to persuade other member state Governments, apart from the legal challenge in

the European Court of Justice, must be based on explanation of the comprehensive and effective range of measures adopted within the UK.
That is now urgent.
Secondly, this is not simply special constituency pleading although, as I represent Gordon in Aberdeenshire, I probably represent the biggest concentration of beef producers, from primary to end product. We have set up a north-east Scotland red meat industry task force which represents all parts of the industry. On Friday, the organisation sent a letter to the Secretary of State for Scotland, the first page of which states that it had already written to him on 1 May and to Lord Lindsay on 12 April and was disappointed not to have received a reply to either of those letters.
The organisation said specifically that, given the importance of ensuring that the system is not abused, it is generally recognised that we have to be extremely firm and must prosecute anyone found guilty of abusing it. It would like to know who will be policing the rendering plants which, it feels, are not subject to the same tight inspections as abattoirs. It is also concerned about people who have fallen through the compensation net—I have mentioned a few of them already—and for whom no measures have been introduced but who, week by week, are getting closer to bankruptcy and liquidation. They are the very people—at the top end of the market—whom we shall need to lead Britain back into the export market when the ban is lifted, but they will not be there if we do not give them adequate support now.
We are speaking on behalf of tens of thousands of people in the industry throughout Scotland, England and Wales and, indeed, Northern Ireland. We want the Government to get the culling and slaughtering scheme fully operational and for it to be fully agreed with our European partners, and the sooner the better. In those circumstances, despite the Minister making a good fist of a difficult situation, the Government amendment to the motion is not good enough. People are not satisfied with the progress made so far—they should not be, and nor should the Government.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Angela Browning): This subject concerns many hon. Members, especially those of us who represent farming communities because we are aware of the seriousness of the bovine spongiform encephalopathy/Creutzfeldt-Jakob disease crisis which has hit not only the farming industry but allied industries.
It is a matter of regret, however, that the subject should come again to the Floor of the House in the form of the Liberal Democrat motion. The hon. Member for North Cornwall (Mr. Tyler) began his address by saying that the Liberal Democrats had refused to indulge in recriminations but went on to give a long list of recriminations. That is not uncharacteristic because it has been the tenor of his party's behaviour on this subject to speak in the Chamber in a statesmanlike way in a spirit of co-operation and to recognise the seriousness of the issue to the industry but, whenever its members had the opportunity to get in front of a microphone, to behave quite differently.
On the very day that the announcement was made, I took part in a BBC South-West television interview with the hon. Member for North Cornwall, who was down the line in the south-west. He questioned the very fact that the Government had made the announcement in the House. If we had hidden it from the House or the country, he would have been the first on his feet to complain about it.

Mr. Nick Harvey: That is not true.

Mrs. Browning: I am just about to quote the hon. Member for North Cornwall, so the hon. Gentleman can decide whether it is true. In the Financial Times on 25 March—the hon. Gentleman can check it—the hon. Member for North Cornwall said:
Ministers must now really state in unequivocal terms which beef products are entirely safe and which may carry some risk, however remote.
That is hardly the judgment of somebody who had accepted what SEAC had said. He was putting question marks over the safety of products. In the Western Morning News on 23 March, he said:
Farmers are very very angry because Ministers have allowed confusion to reign by talking about the risk of beef instead of identifying that it was bovine products.
Bovine products and beef were not a risk. The SEAC recommendations were very clear. Quite what the hon. Gentleman thought that he was doing in stirring the pot in that way, I do not know. It is very strange.
Only recently, the hon. Member for North Cornwall said that the delay in the 30-month scheme was due to lack of staff in the Meat Hygiene Service, which is totally untrue. Even though my hon. Friend the Minister of State explained the matter very clearly, the hon. Gentleman said in the House today that the 30-month scheme was not wanted by the industry and that the Government had dreamed it up to present to the country.
In his speech, the hon. Gentleman even quoted the Booker column of Sunday 12 May, to which he added his support. It described the 30-month scheme as "illegal", a "crackpot scheme" and
a plan for which there is not the slightest rational justification".
Frankly, if that is the view of the hon. Gentleman and his party of the 30-month scheme, what they have said for the past three hours has hardly been worth listening to.

Mr. Tyler: Obviously, I cannot answer all those stupid remarks in one quick intervention, but I can suggest how stupid they are by saying that the hon. Lady has not even cited the right article. I was referring to The Daily Telegraph, not The Sunday Telegraph. She has got the wrong quotation.

Mrs. Browning: If they are stupid remarks, they are also the hon. Gentleman's words—QED.
There have been some more serious speeches in this debate, especially that of my hon. Friend the Member for St. Ives (Mr. Harris), who is well respected and, as a Cornish Member of Parliament, knows the farming community. He summed up the complexity of the scheme and endorsed the points that my hon. Friend the Minister made, when he outlined clearly the way in which the scheme has developed.
My hon. Friend the Member for St. Ives not only described the scheme' s complexity but said that one of the reasons why there was some delay was that we listened to what the farming community wanted. We adjusted the scheme, added the extra money for the clean beef scheme and added the dead weight scheme at the specific request of the farming community. Obviously, such things could not be decided on the day that the proposal was announced. We had to go through the usual channels, talk to Brussels and get it agreed in such forums as the Beef Management Committee before we could assure the House that we would be able to run the scheme.
My hon. Friend the Member for St. Ives also talked about keeping farmers informed. We appreciate the need to keep individual farmers informed. My hon. Friend the Minister has already described the steps that we have taken to inform farmers—personally, by direct mailing—and slaughterhouses and livestock markets. I assure my hon. Friend the Member for St. Ives and other hon. Members who have raised this issue that the Government are conscious of the need for information as things have changed quite quickly. We shall continue to ensure that we inform people of any changes as quickly as possible.
My hon. Friend the Member for Hexham (Mr. Atkinson) raised the importance of the livestock markets and the role of the supermarkets in this matter. Very early in the crisis, the supermarkets said that they would continue to sell British beef. I pay tribute to them—unlike others who decided not to sell British beef—as they have been robust in promoting it. Supermarkets said that they would sell beef that was less than two and a half years old, which is why they have been supportive of the 30-month scheme.
My hon. Friend the Member for Newark (Mr. Alexander) referred to the difficulties that people in his constituency have experienced. I reiterate the point made by my hon. Friend the Minister of State: while we can share the frustration of, for example, the abattoirs that are listed but that are not yet fully operational, it is a matter of the rendering capacity being able to meet what the slaughterhouse industry can deliver and a matter of it being able to process it.
That is why my hon. Friend the Minister told hon. Members that we will progress, as quickly as possible, with a scheme for cold storage so that more animals can come through the abattoirs and be slaughtered and so that the farmers can receive their cheques as quickly as possible. We hope to put that into place soon. Many of the abattoirs that hon. Members have mentioned will be able to move the animals through and that will speed up the process.

Mr. Archy Kirkwood: Will the Minister also look at the possibility of using the Government's influence with the intervention board? Some of the figures from the recent tranches of intervention have been quite disappointing in terms of the amount of beef that has been taken out of the United Kingdom market.

Mrs. Browning: I agree with the hon. Gentleman. As hon. Members will know, we have negotiated opening more boxes with Europe—in fact, we are happy to look at that again. The hon. Gentleman will understand that this is a Europe-wide scheme and in the bids that go forward on a fortnightly basis the United Kingdom has not


always done well—ironically, bids from other countries sometimes do a little better. I assure the hon. Gentleman that we are aware of that and we will keep an eye on it. It is important, and a number of hon. Members have mentioned the difficulty with young bulls.
My hon. Friend the Member for West Gloucestershire (Mr. Marland) outlined the positive side of what is being done. He gave a good summary of the weakness of the argument of the Liberal Democrats this evening. Many of the measures that have already been announced and those that are coming forward show that this issue will not be with us for a short period of time. As hon. Members know, we are looking at the long term. For example, we hope to introduce the mature beef scheme as quickly as possible.
We are currently consulting in this regard, and the consultation period is only two weeks. I had two meetings with industry representatives prior to the consultation document being issued. We hope that the mature beef scheme—which will affect animals that are more than two and a half years old—will be the forerunner for a wider scheme. It would be impossible to launch a scheme that is too wide to begin with; it will need to be narrow. I hope to get it up and running by June.

Mr. Malcolm Bruce: indicated dissent.

Mrs. Browning: If we are to reassure the public and Europe—which the hon. Gentleman has mentioned several times this evening—it is important that we have in place a scheme where we can certify herds and put in place documentation tags and other systems that will ensure that no one can point the finger and say that there are weaknesses in it. If the hon. Gentleman wants us to take a scheme off the shelf and introduce it next week, we could do it, but it would not be in the interests of the industry.

Mr. Bruce: The hon. Lady must acknowledge that the specialist herd is a small proportion. I refer to the selective slaughter agreement. We should get an agreement on it so that we can get the ban lifted from all beef.

Mrs. Browning: I was very interested to hear what the hon. Gentleman and his friends said in Brussels. The selective slaughter policy is primarily a selective scheme to take out those cohorts of animals that have been fed infected feed at the same time on the same farm as animals that have suffered from BSE. The hon. Gentleman denigrated that policy and dismissed it, and he criticised the Government when that proposal was first presented to Brussels, scathingly calling it a "non-paper".
I have to tell the hon. Gentleman that any more slaughter of any kind must pass the test of being approved by the industry in this country and by the Members of the House before it is presented to Brussels. That is the scheme that is on the table in Brussels. At the moment, our European partners have said no; they want more herds and animals killed. If the hon. Gentleman is supporting that, he had better say how many more animals he wants killed.

Mr. Kirkwood: rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 62, Noes 124.

Division No. 126]
[10.00 pm


AYES


Ainger, Nick
Jones, Barry (Alyn and D'side)


Alton, David
Jones, Lynne (B'ham S O)


Ashdown, Rt Hon Paddy
Jones, Nigel (Cheltenham)


Barnes, Harry
Keen, Alan


Beith, Rt Hon A J
Kilfoyle, Peter


Brown, N (N'c'tle upon Tyne E)
Llwyd, Elfyn


Bruce, Malcolm (Gordon)
Lynne, Ms Liz


Callaghan, Jim
Maclennan, Robert


Campbell, Menzies (Fife NE)
Maddock, Diana


Carlile, Alexander (Montgomery)
Michie, Mrs Ray (Argyll & Bute)


Chidgey, David
Moonie, Dr Lewis


Clark, Dr David (South Shields)
Morley, Elliot


Coffey, Ann
Mudie, George


Cummings, John
Nicholson, Emma (Devon West)


Cunningham, Rt Hon Dr John
Pike, Peter L


Dafis, Cynog
Raynsford, Nick


Davies, Chris (L'Boro & S'worth)
Rendel, David


Dewar, Donald
Salmond, Alex


Dixon, Don
Skinner, Dennis


Dobson, Frank
Spearing, Nigel


Eastham, Ken
Steel, Rt Hon Sir David


Etherington, Bill
Strang, Dr. Gavin


Evans, John (St Helens N)
Taylor, Mrs Ann (Dewsbury)


Ewing, Mrs Margaret
Taylor, Matthew (Truro)


Foster, Rt Hon Derek
Tipping, Paddy


Godman, Dr Norman A
Tyler, Paul


Golding, Mrs Llin
Wallace, James


Harvey, Nick
Welsh, Andrew


Hill, Keith (Streatham)
Wigley, Dafydd


Hoon, Geoffrey



Hughes, Kevin (Doncaster N)
Tellers for the Ayes:


Hughes, Simon (Southwark)
Mr. Archy Kirkwood and Mr. Don Foster.


Janner, Greville





NOES


Alexander, Richard
Clifton-Brown, Geoffrey


Amess, David
Coombs, Simon (Swindon)


Ancram, Rt Hon Michael
Couchman, James


Arnold, Jacques (Gravesham)
Currie, Mrs Edwina (S D'by'ire)


Ashby, David
Devlin, Tim


Atkinson, Peter (Hexham)
Douglas-Hamilton, Lord James


Baker, Nicholas (North Dorset)
Dover, Den


Baldry, Tony
Elletson, Harold


Bates, Michael
Evans, David (Welwyn Hatfield)


Biffen, Rt Hon John
Evans, Jonathan (Brecon)


Bonsor, Sir Nicholas
Evans, Nigel (Ribble Valley)


Boswell, Tim
Evennett, David


Bottomley, Peter (Eltham)
Fabricant, Michael


Bowis, John
Fenner, Dame Peggy


Brandreth, Gyles
Fishburn, Dudley


Brazier, Julian
Forman, Nigel


Bright, Sir Graham
Fox, Dr Liam (Woodspring)


Brooke, Rt Hon Peter
Fox, Rt Hon Sir Marcus (Shipley)


Browning, Mrs Angela
French, Douglas


Budgen, Nicholas
Gallie, Phil


Burns, Simon
Gillan, Cheryl


Burt, Alistair
Goodson-Wickes, Dr Charles


Butcher, John
Gorman, Mrs Teresa


Butler, Peter
Gorst, Sir John


Carlisle, Sir Kenneth (Lincoln)
Greenway, Harry (Ealing N)


Carrington, Matthew
Greenway, John (Ryedale)


Carttiss, Michael
Griffiths, Peter (Portsmouth, N)


Chapman, Sir Sydney
Harris, David


Churchill, Mr
Hawkins, Nick


Clappison. James
Heald, Oliver






Hendry, Charles
Roberts, Rt Hon Sir Wyn


Hughes, Robert G (Harrow W)
Robinson, Mark (Somerton)


Hunt, Rt Hon David (Wirral W)
Rowe, Andrew (Mid Kent)


Kellett-Bowman, Dame Elaine
Shaw, David (Dover)


King, Rt Hon Tom
Skeet, Sir Trevor


Kirkhope, Timothy
Smith, Tim (Beaconsfield)


Knapman, Roger
Spencer, Sir Derek


Knight, Mrs Angela (Erewash)
Spink, Dr Robert


Knight, Rt Hon Greg (Derby N)
Stephen, Michael


Knight, Dame Jill (Bir'm E'st'n)
Stem, Michael


Lang, Rt Hon Ian
Streeter, Gary


Lawrence, Sir Ivan
Sweeney, Walter


Legg, Barry
Temple-Morris, Peter


Lidington, David
Thomason, Roy


Luff, Peter
Thompson, Patrick (Norwich N)


Lyell, Rt Hon Sir Nicholas
Thornton, Sir Malcolm


MacKay, Andrew
Townsend, Cyril D (Bexl'yh'th)


Maitland, Lady Olga
Tredinnick, David


Malone, Gerald
Twinn, Dr Ian


Marland, Paul
Viggers, Peter


Martin, David (Portsmouth S)
Walden, George


Merchant, Piers
Walker, Bill (N Tayside)


Mitchell, Andrew (Gedling)
Waller, Gary


Nelson, Anthony
Wells, Bowen


Neubert, Sir Michael
Whitney, Ray


Nicholls, Patrick
Whittingdale, John


Oppenheim, Phillip
Widdecombe, Ann


Ottaway, Richard
Wilkinson, John


Paice, James
Winterton, Nicholas (Macc'f'ld)


Pattie, Rt Hon Sir Geoffrey
Wolfson, Mark


Pickles, Eric



Porter, David (Waveney)
Tellers for the Noes:


Rathbone, Tim
Mr. Timothy Wood and Mr. Patrick McLoughlin.


Redwood, Rt Hon John

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.

MADAM SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House welcomes the Government's commitment to restoring consumer confidence in the UK beef industry by introducing a slaughter scheme for cattle over the age of 30 months; notes the progress made in the 30-month scheme; recognises the dependence of the scheme on co-operation between farmers, auctioneers, slaughterers and renderers and welcomes the steps taken to foster such co-operation to ensure that the maximum slaughter rates are achieved.

SITTINGS OF THE HOUSE

Motion made, and Question put forthwith, pursuant to Standing Order No. 22,

That this House, at its rising on Wednesday 22nd May, do adjourn till Tuesday 4th June.—[Mr. Streeter.]

Question agreed to.

HOME AFFAIRS

Ordered,

That Mr. Peter Butler be discharged from the Home Affairs Committee and Mr. Warren Hawksley be added to the Committee.—[Mr. MacKay.]

School Security

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Streeter.]

Mr. Greville Janner: I am grateful for the opportunity to raise in the House the horrendous problem of security in our schools. I have campaigned for many years and begged the Government to make available adequate resources for schools to provide security measures. They need these to counter the attacks made upon them, often daily, and to provide not only replacements for the goods and buildings that are destroyed but, more important, adequate security measures that do not have to be funded from schools' inadequate budgets.
There are 43 schools in my constituency and in the past financial year no fewer than 41 of them have been attacked by vandals, arsonists and burglars—many of them on several occasions. The cost of putting right the damage caused is estimated at more than £315,000.
In Leicestershire, the figures for arson have multiplied by six since the Government came to power. In 1979, there were about a dozen arson attacks on public buildings, including schools. In the past year, there were 72 such attacks. Schools and other public buildings are suffering from vandalism, burglary and other crime. Schools are forced to spend on security from budgets that should be used for teaching, for books and for other equipment because no adequate moneys are available to cover the cost of installing the preventive measures needed.
Despite the difficulty of obtaining figures, research undertaken for me by Pallavi Sharma and Tom Playfoot shows that secondary schools in my constituency fall into two categories. Schools in the first category have no private insurance and must pay 70 per cent. of the cost of repairs and replacements. Primary and special schools must pay 55 per cent. The second category is schools that participate in a private insurance scheme. They must pay 20 per cent. of the premium, with an excess of 70 per cent. for secondary schools and 55 per cent. for primary and special schools. They should have to pay nothing. There is no reason why schools should be forced to meet from their budgets the costs resulting from vandalism, burglary and arson.
Many schools in the most disadvantaged and vulnerable areas cannot even obtain insurance because the premiums are too high. They are left totally uninsured.
Schools that want to install closed circuit television, security fencing, alarm systems and locks must, in most cases, meet the whole cost themselves, or at least a substantial part of it. I ask the Government to pay the full amount from whatever budget may be available. If no budget is available, I ask the Government to make such funding a priority.
We are not talking primarily of awful tragedies such as the shootings in Dunblane—although that incident has thrown the whole problem into stark relief. We are talking about the everyday miseries of ordinary schools in my constituency and throughout the country. I have tried to obtain details of the cost, without success. The Department for Education and Employment says that


such figures are not available. I give notice to the Minister that I shall be tabling a series of written questions to force the figures out of the Government. There is no reason why all local education authorities should not produce such figures, in the same way that Leicestershire has done for me.
Schools must compete with public buildings for a limited budget. Only four schools in my constituency received council moneys for security, and each school had to pay half from their own budget. In the past two years, Leicestershire education committee—starved of funds by Government measures—has received no money for school security. That is wrong. Schools should have proper security. Of course it is sad that such measures are necessary. We would all much prefer them not to be necessary. The reality is that with the cracking of the social system, the growth of deprivation and the causes of crime left unattended, schools must take security measures.
I certainly hope, after Dunblane, that the time will come when the Government ban handguns in people's homes, but that will not be enough. The smashing of schools and equipment, the stealing of equipment and the burning of schools cannot be dealt with by banning guns.
I offer the House a few examples. Barleycroft county primary school, an excellent school in my constituency, has a first-class head teacher, Philip Goulding, who at the age of 43 was attacked by five or six youths at the end of last year after he had caught one of them who had stolen a mobile phone from a car. He needed 16 stitches, he had a broken nose, cuts above both eyes, a trapped nerve and head and neck injuries. Over the past four years his school has had to spend £20,000 of its education budget on security measures. That is disgraceful; it should not be permitted.
There is an excellent special school with a brilliant head teacher, Rufus Gordon, whom I have known for many years. He wrote to the Secretary of State for Education and Employment on 29 January as follows:
In the past three years I have lost my Science Teacher and was not allowed to replace her due to financial restrictions.
That in itself is shocking enough.
I have made my Deputy redundant, my Senior Mistress and Junior Teacher redundant, my Home Economics Teacher redundant, and my Languages and Support Teacher redundant. I have made Nursery Nurses redundant and Ancillary. I depend on hourly-paid teachers to stay afloat—that is, to cover the National Curriculum … There is no one else I can make redundant … There is no way we can maintain the payments on the closed circuit television—I have had to stop, in any case, paying our Premises Officer to come in on Saturday and Sunday to replace the video tape in the CCTV, as that was costing me £30 each weekend",
which the school has not got.
I hope that the Minister, too, is shocked by this. I hope that she understands the outrage among teachers in my constituency and will now at last provide the money to cover these costs.
I have a soft spot for special schools such as the Western Park school and the Emily Forte school, which was set ablaze a short time ago. But I hope that the money for security will be forthcoming for all the schools in my constituency, not just these two.
With all these miseries besetting our schools, what do the Government intend to do? I pay tribute to the Secretary of State who was kind enough to come to my constituency at my invitation and meet teachers and head teachers, but nothing has happened since. The nearest to anything happening has been the preparation of a report which, by the sort of amazing coincidence for which this House is renowned, is due to appear tomorrow. The Secretary of State has been kind enough to provide me with a copy of it, but I cannot refer to it in this debate. I hope, Madam Speaker, to raise the matter as a point of order, because it is wrong, when there is a forthcoming Adjournment debate on a particular subject, to issue a written answer to a parliamentary question the next day so that there is no chance to debate it.
I hope that the report will be favourable to my views and that it will accept what is patently obvious to everyone but the Government: that schools, teachers and pupils are suffering because there are no adequate security arrangements that schools can make without cutting into their budgets.
It is not enough simply to issue a report. As Chairman of a Select Committee I have seen many reports issued, pigeonholed, commented on and then die the death. That will not do in this case. If it turns out that the report agrees with me, I hope that the Minister will undertake tonight immediately to implement measures to end this awful situation.
We all know how much the schools are suffering, but I wonder whether the Government understand that the greater the disadvantage in an area, the greater the suffering for the school. If there is vandalism, burglary or arson at a school in a well-off area, the teachers can bring together parents who can, and do, chip in and help the school to replace the losses and, often, to put in security measures. I appeal to the Under-Secretary on behalf of the disadvantaged schools, in areas where the parents do not have the money to do that and, much as they would wish to, cannot help. I appeal to the Under-Secretary on behalf of areas with broken homes and broken schools, where there is vandalism, arson and burglary and where the police, even with the few extra who will be put on—that is all it will be—cannot hope to cope.
I know that I speak with the full backing of the teachers, the parents and the Leicestershire police, who are under great strain. I beg the Under-Secretary to understand that the teachers want to teach and they want the resources to teach. The letter that I have read out to her from the Western Park school shows a state of affairs that should not be allowed to exist in a civilised country—certainly not in one in which the funds could be made available if the Government wished to do so. I hope that the Government will now give security in schools proper priority and that the Under-Secretary will produce for us tonight a constructive reply to a plea that is made in the greatest of good faith, on behalf of people who badly need the help that only the Government can provide.

Mr. Keith Vaz: It is typical of the generosity of my hon. and learned Friend the Member for Leicester, West (Mr. Janner) to offer his Leicester


colleagues the chance to make a brief contribution to the debate. I wish to pay tribute to him for the way in which he has championed this cause. I first met my hon. and learned Friend 20 years ago, when I was a student with his son at university. I came to the House at his invitation to have a look at the proceedings. I knew then of his reputation for fighting hard on behalf of his constituents, and tonight we have seen a tour de force and an example of the passion and the commitment that he gives to his constituents of Leicester, West. He will be missed after the next election, because, as the House knows, he has announced his retirement.
My hon. and learned Friend has raised a crucial issue and he has put forward, in the most eloquent and passionate terms, the concern of teachers, parents and ordinary citizens about vandalism in schools in Leicestershire. I do not want the House to think that such incidents happen only in Leicestershire. Of course, it is a national problem, and my hon. and learned Friend has merely highlighted it on a local basis.
I wish to add my voice to my hon. and learned Friend's and to stress the need for the Under-Secretary to come up with firm proposals in her reply. I, too, would like to know what is in the report that the Secretary of State will publish tomorrow. I hope that the Minister has seen a copy; my hon. and learned Friend said that he had seen a copy. It is vital that we do not just get promises and warm words, but that we have some positive action to ensure that schools are supported. As my hon. and learned Friend said, they suffer greatly because of the cuts in budgets that they have had to endure after 17 years of the Government.

The Parliamentary Under-Secretary of State for Education and Employment (Mrs. Cheryl Gillan): indicated dissent.

Mr. Vaz: It is no good the Under-Secretary shaking her head. It is true that the schools are suffering because of the high rate of crime, which has doubled since the Conservatives have been in office.
I have just had a conversation with Mr. Jones, who is a teacher at Charles Keane college. My hon. and learned Friend knows it well, because people from both our constituencies attend it. Mr. Jones told me that last night there was a burglary at Charles Keane college. The burglars stole the telephone keyboard, which is essential to the functioning of the school, which will have to replace it out of its budget.
We want some action from the Under-Secretary and a positive response to the excellent campaign led by my hon. and learned Friend.

The Parliamentary Under-Secretary of State for Education and Employment (Mrs. Cheryl Gillan): I congratulate the hon. and learned Member for Leicester, West (Mr. Janner) on securing an Adjournment debate on such an important subject. I am sad to hear that he has announced his retirement. I am sure that the House will be a poorer place without him. The hon. and learned Gentleman is renowned, most notably for his buttonholes. I note that he is not wearing one tonight. I hope that that is not the result of anything that I have done.
The hon. and learned Gentleman shares a concern about security in schools with many other Members. I am pleased that he allowed his hon. Friend the Member for Leicester, East (Mr. Vaz) to contribute to the debate. The hon. and learned Gentleman and the hon. Gentleman join many colleagues throughout the House, including my hon. Friend the Member for Rutland and Melton (Mr. Duncan), the Secretary of State for Health, my right hon. Friend the Member for Loughborough (Mr. Dorrell), my hon. Friend the Member for North-West Leicestershire (Mr. Ashby) and my hon. and learned Friend the Member for Harborough (Mr. Garnier), to name but a few in the area around the hon. and learned Gentleman's constituency who are interested also in school security; as, indeed, we all are.
As the hon. and learned Gentleman rightly said, the timing of tonight's debate is both fortuitous, in the sense that the report of the working group on school security is to be published tomorrow, and unfortunate because, of course, I cannot tonight give more than a flavour of the group's recommendations. A flavour, however, I shall give at this stage. I do not think that the hon. and learned Gentleman has too long to wait. Indeed, given the late hour, it will not be long at all before the report is published. I hope that the hon. and learned Gentleman's curiosity will be fully satisfied.
School security is a problem that concerns us all, as parents, as members of the local community and certainly as politicians. Vandalism and arson damage the fabric of schools, the morale of their staff and pupils and the effectiveness of teaching and learning.
The Government are entirely at one with the hon. and learned Gentleman in our concern for schools suffering from such crimes. He kindly referred to the visit of my right hon. Friend the Secretary of State to Braunstone Hall school in Leicester last year, to discuss school security matters with local head teachers. In a recent exchange with the hon. and learned Gentleman, I expressed my great sadness over the arson attack faced by Emily Forte school in his constituency. It was a great sadness and I reiterate my remarks on that earlier occasion.
I know also that the hon. and learned Gentleman and the rest of the House shared the country's shock and grief at the recent tragic events at St. George's school in Maida Vale and at Dunblane. Those events were all the more horrific because of the traditional place of schools at the heart of their communities. Schools naturally want to be open and welcoming to pupils, to parents and to the local community. They are often centres for wider education and leisure activity locally. They seek to be encouraging of education generally, and to draw parents and the community into supporting the education of local children. Those characteristics benefit and enrich our villages, towns and cities. They should be valued and protected.
Nevertheless, it is natural that recent events should have raised questions about whether that accessibility exacts too high a price; whether schools now need to secure themselves more rigorously against threats from outside.
Despite the emotional impact of the incidents that we are discussing, there is general agreement that attempting to turn schools into fortresses is not the right response. There is a need to strike a balance between


access and security. It is to the credit of heads, teachers and school governors throughout the country that they are determined to avoid a siege mentality. Such determination should be applauded and supported.
That response should not be taken as an excuse for inaction. It is clear that there are limits to what can sensibly be done to prevent events as extreme as the horrific killings in Dunblane, but there are effective and practical measures that can be taken to protect staff, pupils and premises, without turning schools into fortresses.
I have already referred to the working group on school security, which my right hon. Friend the Secretary of State established immediately following the fatal stabbing of head teacher Philip Lawrence. In the wake of his tragic death, its remit was to consider what more should be done to help to ensure that schools are safe places for their staff and pupils.
The group brought together representatives of all the main interests in school security: head teacher, teacher and support staff associations; school governors; voluntary aided, grant-maintained and independent schools; local education authorities; parents; the police; and Government Departments. We are immensely grateful to the group's members for their efforts in drawing up the report so quickly and with such care. I am sure that the hon. and learned Gentleman will read it with interest, as it bears on much that has been said tonight—if, indeed, he has not already had a sneak read earlier.
Without wanting to pre-empt the detailed recommendations, I can confirm that the group has made a range of positive and practical suggestions, covering issues such as the role of governors, local education authorities and school staff in maintaining and improving security; the availability of advice and guidance on security-related matters to schools and others with an interest; the law relating to troublemakers in and around schools; and funding for security improvements. The Government's response will be in equally positive vein: indeed, we have already acted on early recommendations from the group.
First, we have taken firm action to counter the menace of people carrying knives and other weapons in schools. The Offensive Weapons Bill, which is currently before Parliament—promoted by my hon. Friend the Member for Sutton and Cheam (Lady Olga Maitland)—has been amended: it now makes it an offence to carry a knife or other offensive weapon on school premises, and we are extending to those premises police powers of search for such weapons. The press has focused on the application of the measure to pupils, but it is at least as much concerned with weapons carried by intruders.
Secondly, following recent consultation, we are adding school security to the list of items on which school governors must report annually to parents. That will help to highlight and reinforce the important role of governors in maintaining and improving security in their schools. I have already mentioned that the school security working group has considered funding matters. There are already sources of funds that could, depending on LEAs' and schools' priorities, be used to pay for improved security. LEAs receive formula capital allocations for improvement and replacement work in county and voluntary controlled schools; equivalent support for grant-maintained schools

is channelled through capital formula allocations from the Funding Agency for Schools for England. Voluntary aided schools can receive support through the minor works programme and the voluntary rationing scheme.
In the current year, the schools renewal challenge fund will provide the bulk of central Government capital funding for improvement and refurbishment of LEA and voluntary aided schools. The criteria for the scheme, published last week, indicate that projects that include measures to improve the security of school premises will be particularly welcome. Schools have also been able to bid to the Home Office for funds from the closed circuit television challenge competition, worth £15 million in the current financial year. The working group has taken all those existing sources into account in considering its funding recommendations.
The hon. and learned Gentleman has argued vigorously that the current arrangements are not adequate, and that funds should be allocated specifically to improving school security. I believe that, when he sees our response to the group's report, he will be reassured about the Government's determination to play their proper part in supporting action to improve school security.

Mr. Janner: I appreciate what the Minister has said very much. Can she give an indication of when the Government will respond to the report's recommendations?

Mrs. Gillan: The hon. and learned Gentleman is jumping the gun. I have said that we are publishing the report tomorrow, and that I believe that he will join us in welcoming the Government's response. He can press me, but I am afraid that he will get no further tonight: he will have to wait until tomorrow.
The report is not, and should not be, the last word on school security. Specifically, important lessons may arise from Lord Cullen's public inquiry into the Dunblane tragedy. The Government will of course consider carefully any further issues that that inquiry raises, but school security should not be an issue to be considered only in the wake of individual high-profile incidents which, however shocking, reveal only a partial picture of the problems faced by most schools. To be effective, school security measures must be based on a regular and realistic assessment of the day-to-day risks faced by schools in different areas and in conditions that will vary over time. It is important that all people concerned remain alert to new needs and to changing circumstances. Protective measures are relevant only if they enable school staff and pupils to work and to study in safety.
That must be a continuing priority for all people with a part to play. It is one to which the Government are fully committed, and I refer the hon. and learned Gentleman especially to the Department's guidance to schools on security issues, which covers crime prevention in schools, intruder alarm systems, closed circuit television, security lighting, school glazing and vandalism, graffiti removal and control, lockers and secure storage and "Schoolwatch UK", a video on the main criminal threats faced by schools.
The Government are fully committed to the security of the UK's schools. I was sorry that, even though the hon. and learned Gentleman and the hon. Member for Leicester, East spoke on this subject with such emotion,


I yet again failed to hear the amount of money that may be forthcoming from the Labour party in this matter. Again, no spending pledges were made, but there was merely a plea for more money.

Mr. Janner: Wait until we are elected.

Mrs. Gillan: That will be the day.
I congratulate the hon. and learned Gentleman on securing the debate and I hope that, tomorrow, he will be big enough to welcome the report warmly, and the Government's response.

Question put and agreed to.

Adjourned accordingly at twenty minutes to Eleven o'clock.